Weitek Corp warns that it does not expect revenue for the fourth quarter 1994 to exceed the $6.5m it did in the third; the company’s overall gross margin is expected to decline substantially from third-quarter levels and as a result, it sees a loss for the fourth quarter significantly greater than the $1.6m for the third; fourth-quarter margins are expected to decline due to increased competition, which is expected to depress sales of its Sparc Power uP products, and due to a decline in yields on a large number of wafers manufactured by a third-party supplier; the company is taking immediate action to downsize and cut expenses and expects to record a one-time charge in its fourth quarter; the amount will be determined over the next few weeks.
Micom Communications Corp expects revenues for the third quarter to December 31 to be about $20m to $20.5m, compared to $21.0m for the third quarter last year: it is due to inventory reductions, made primarily in anticipation of new Micom product releases scheduled during the next two quarters; earnings are expected to be $0.08 to $0.10 per share compared with $0.12 per share for the comparable quarter last year; Micom says it also expects further adjustments in distributor and other sales channel inventories over the next three to six months as it expands its product range.
The US Department of Energy’s Los Alamos National Laboratory has gone for a massively parallel T3D from Eagan, Minnesota-based Cray Research Inc for monitoring the safety and reliability of Uncle Sam’s nuclear weapons stockpile: the 256-processor T3D and an interim four-processor Cray Y-MP supercomputer system were installed in December and Los Alamos expects to upgrade the T3D to 512 processors and to replace the Y-MP with a four-processor version of Cray’s next-generation parallel vector supercomputer system, the one code-named Triton, some time this year; no details on how much the lab paid.
Mountain View, Californiabased Netscape Communications Corp – formerly Mosiac Systems Inc – and the University of Illinois have settled their legal spat over the Mosaic software for the Internet, but not without some residual hard feelings: Mosaic was developed at Illinois’ National Center for Supercomputing Applications but most of the team that developed it left to form the company that commercialised and sold a rival to it; the university objected to this, saying the company needed to license Mosaic and it also objected the firm’s original name, Mosaic Communications; under the out-of-court settlement Netscape does not have to license competing Internet software and the university dropped all assertions of wrongdoing on Netscape’s part.
Computer Sciences Corp of El Segundo, California is in the final stages of negotiating a monster $1,500m contract with Los Angeles, California-based Hughes Aircraft Co under which the computer-services company would perform Hughes’s data management functions: the contract, with an expected term of eight years, was expected to be signed before the end of 1994; Hughes Aircraft, a unit of General Motors Corp, confirmed that it is negotiating a facilities management pact, but did not name the other party.
L M Ericsson Telefon AB won a $50m order from Telefonica Peru for its AXE digital telephone exchanges.
Methuen, Massachusetts-based MicroTouch Systems Inc has introduced a large, low-cost touch monitor for public computer kiosks, the TruePoint Kiosk Touch Monitor: it combines an NTSC display, capable of running Super VGA graphics with a MicroTouch capacitive touch screen, and comes mounted in an open metal frame it sells for $1,500, about 50% less than similar products.
The Japanese Ministry of Posts & Telecommunications has ordered Nip interconnect the lines of the three 1980s vintage common carriers with its city phone lines: the three companies, DDI Corp, Japan Telecom Co and Teleway Japan Corp, plan to use the lines for virtual private networks; Nippon Telegraph, which began offering the service on discounted rates i
n February, objected to its rivals’ attempts to set their own rates for the service.
Ameritech Corp is to spend $800m or so buying in up to 20m of its shares over the next three years.
Ameritech Corp has filed a tariff for a service that will enable long-distance carriers and other communications companies, such as cellular and personal communications services providers, to offer its customers portable telephone numbers, which are to have the pre-fix 500 in the US: the service should start this month if approved by the Federal Communications Commission; the portable numbers give long-distance carriers and other companies the capability to deliver services to a wide range of customers, regardless of where they are.
The Indian government has approved a joint venture between Washington-based Comsat Corp and pharmaceutical company Max India Pte Ltd, which is seeking to diversify: the venture will provide a range of private digital communication services for data, speech and video on a single network based on Very Small Aperture Terminal technology.
Arizona-based Best Rate Inc claims it can halve a customer’s long distance phone bills: customers will pay a one-off $135 for a wall-mounted box and $3.85 a month subscription; when the user dials a number the box detects whether it is long distance or not, and by accessing a database of phone tariffs sends it through the lowest cost route; the firm is the latest to take advantage of Federal Communication Commission regulations sset up in the 1970s forcing long distance firms to deal with network resellers and the First Choice Connection service will be launched in two months; it is seeking concessionaires to market the service.
Montvale, New Jersey-based Geotek Communications Inc has completed a successful test of its FHMA Frequency Hopping Multiple Access telecommunications technology, in Israel and placed a $20m order for all the equipment necessary to deploy the system in areas in the northeastern US: the test demonstrated the system’s mobile telephony features, with vehicles making and receiving mobile to mobile calls on the network and incoming and outgoing calls switched via the public switched telephone network.
AT&T Corp has awarded a $252m contract to Advanced Electronics Co, a Riyadh-based offset company: the contract, running from late this year to 2001, is for local manufacture of printed circuit boards for the $4,000m AT&T deal to double the number of lines in Saudi Arabia; AT&T is expected to invest $400m in Saudi Arabia as part of an offset programme to bring advanced technology in exchange for arms orders.
Computer Outsourcing Services Inc, a New York payroll and data processing services firm, has a letter of intent to acquire a privately-owned payroll processing services company as part of its strategy to create a significant US-wide payroll processing company: the firm to be acquired generated revenues in excess of $2.5m for its latest fiscal year ended May 31 1994; the purchase will be for an undisclosed sum in cash and stock and is expected to close within 60 days subject to negotiation of definitive agreement.
The US Federal Communications Commission has approved Ameritech Corp’s request to build a two-way video network that will bring interactive television services to 6m consumers in Illinois, Indiana, Michigan, Ohio and Wisconsin by the year 2000; the programme offerings will be announced when the network becomes operational, which is expected to be in the fourth quarter of 1995 but are likely to include video on demand, home health care, interactive educational courses, distance learning, interactive games, shopping and other entertainment and information services.
The incredible shrinking Digital Equipment Corp is selling yet again, and the latest bit to go is its Mumps medical database and operating environment: it is being sold to InterSystems Corp in Cambridge, Massachusetts on undisclosed terms; InterSystems said its annual sales would jump to as much as $40m as
a result of the deal, suggesting that the database generates sales of at least $15m.
The European Commission is investigating Deutsche Telecom AG and France Telecom’s proposed Atlas answer to British Telecommunications Plc’s Concert services venture to determine whether the alliance will impede competition as Europe prepares to open telecommunications networks and services in 1998; the Commission is expected to seek to force France and Germany to bring forward liberalisation of their markets in exchange for approval of the alliance, with Reuters suggesting that the most likely compromise would be for the French and German governments to allow alternative networks of new carriers formed by the power companies, railways and banks with their own networks to begin offering service – but that would not be sufficient for the US authorities to allow the proposed investment in Sprint Corp, because it would effectively confine liberalisation to locally-owned companies, and would still keep the likes of AT&T Corp out.
Legent Corp, Herndon, Virginia has wooed AT&T Global Information Solutions chairman and chief executive Jerre Stead away to be its chief executive, succeeding John Burton; Jerre will also become chairman when Joe Henson retires next month.
So who will be the man to turn AT&T Global Information Solutions around now? According to the Wall Street Journal, names on AT&T Corp’s list include Willem Roelandts and Gary Eichhorn from Hewlett-Packard Co, and Roel Pieper, former chief of AT&T’s Unix software business and now chief executive of UB Networks; AT&T chairman Robert Allen does not sound too enchanted with the former NCR, saying that while Jerre Stead leaves it much better positioned, we’re not going to make a lot of money in that business in 1994 – could it put the unit up for sale?
The Hughes Aircraft Co arm of General Motors Corp duly signed Computer Sciences Corp to an eight-year $1,500m facilities management deal; about 1,100 Hughes employees will transfer to Computer Sciences.
China is gearing up to establish two large manufacturing groups in an attempt to break the monopoly that foreign telecommunications companies hold over its digital telephone exchange market, China Daily reported: over 130 enterprises have been set up around the country to produce such systems and the Ministry of Electronics wants to merge domestic enterprises, research institutes and universities to form the two large groups to produce the locally-developed HJD-04 and EIM-601 digital exchanges; each is to develop annual capacity of more than 3m lines.
Wang Laboratories Inc now has definitive agreement to acquire Compagnie des Machines Bull SA’s worldwide workflow and imaging business, US government systems business, US customer service business and its sales and service subsidiaries in Canada, Mexico, Australia, and New Zealand, and says it is considering a bank commitment for the cash part of the acquisition – Wang is required to deliver at closing $110m in cash, $27.2m in short-term notes and 1.650m new Wang common shares.
Chantilly, Virginia-based printer manufacturer Genicom Corp is expanding with a letter of intent to acquire almost all assets and liabilities of Printer Systems Corp.
Boulder, Colorado-based US Wireless Data Inc will reduce its workforce and operating expenses by about 25% by the end of January, moves it hopes will save it $90,000 a month: the programme will leave the company with 24 employees in its two Colorado facilities, which are in Boulder and in Colorado Springs.
Telefonica de Espana SA and GTE Corp each declined comment on reports that they were close to a deal that would involve GTE taking a stake in Telefonica’s international unit to expand in Latin America.
Viacom Inc is to sell its cable television systems for over $2,000m to an enterprise controlled by minorities under a programme that would give Viacom a tax break of up to $400m, the Washington Post reported: it says Viacom is finalising details of the s
ale to partnerships headed by a black businessman in the largest-ever purchase of corporate assets by a member of a minority community in the US, so qualifying for the federal tax break; investors in the partnerships include Tele-Communications Inc.
Fremont, California-based Media Vision Technology Inc has won its discharge from bankruptcy protection and signed an agreement for a $15m secured line of credit with funds and accounts managed by the TCW Group Inc and an affiliate; all its pre-bankruptcy debts have been converted into 20m new shares.
Philips Electronics NV will invest $10m to build a plant to produce video compact disk players in the town of Kwidzyn in northern Poland, the Polish PAP news agency said.
Noise Cancellation Technologies Inc says it has acquired the exclusive rights to a new silicon micromachined microphone chip technology that improves intelligibility and clarity of communications in applications such as teleconferencing, telephony, video conferencing, speech recognition, audio recording and audio playback; it says that the chip will be commercially available in the second half of 1995.
Looks like a benefit of unwanted competition from Nomai SA – Fremont, California-based SyQuest Technology Inc is cutting prices on its 5.25 44Mb, 88Mb and 200Mb disk cartridges by almost 30%: the company in part credits higher sales volume and lower production costs at its Penang, Malaysia and Singapore plants; Syquest has now shipped more than 2m drives and 8m cartridges, and in 1994 it shipped more drives and cartridges than in any fiscal year in its history.
The Chelmsford, Massachusetts-based SunExpress Inc unit of Sun Microsystems Inc is to distribute the NQE Network Queueing Environment batch processing and automatic load balancing program for Unix networks on behalf of the CraySoft Inc software unit of Cray Research Inc.
IBM Corp executed its vicious coup against Intel Corp with a finesse the company seldom demonstrates in the rest of its business: the timing was brilliant, putting the Pentium flaw back onto the front pages just as the story was fading and analysts that said it would be a nine-day wonder were congratulating themselves, and the announcement was made to maximise Intel’s discomfiture – a facsimile message from IBM’s Richard Thoman saying he had been not been able to find Andy Grove’s phone number arrived at Intel’s offices after the announcement was made, and the effect was electric – traffic on long-distance lines to the West Coast from worried customers was so heavy that for a time the system couldn’t handle the capacity – and according to the New York Times, Grove, who has a listed number, was so upset by the fax that he called directory inquiries twice to ask for his own number to make sure he was reachable.
