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Briefs Hindsight And Foresight: June 7, 2004

SYMBOL SETTLES WITH SEC Symbol Technologies last Thursday agreed to pay approximately $138 million in penalties to settle charges of accounting fraud. The Securities and Exchange Commission, meanwhile, charged 11 former executives from the Holtsville, N.Y., mobile products vendor with federal securities fraud.

SYMBOL SETTLES WITH SEC

The agreements between Symbol and the SEC and the U.S. Attorney's Office for the Eastern District of New York call for Symbol to pay a $37 million penalty, payable to a restitution fund for Symbol investors, and $3 million to the U.S. Postal Inspection Service Consumer Fraud Fund. Also, as part of its settlement of private shareholder litigation, Symbol said it would pay $98 million.

The SEC found that from at least 1998 until early 2003, Symbol and its former executives engaged in numerous fraudulent accounting practices that led to cumulative net revenue of more than $230 million and more than $530 million on its pretax earnings. Bill Nuti, Symbol president and CEO, said in a statement he believes the company has succeeded in putting the vast majority of its problems behind it.

TIPPINGPOINT REPORTS LOSS
Intrusion-prevention vendor TippingPoint Technologies reported a loss of $4.8 million on revenue of $3.9 million for the first quarter of fiscal year 2004, ended April 30.

Though the company's first-quarter loss was higher than the $4.6 million loss posted in the first quarter of fiscal year 2003, executives said the revenue figure marked an increase of 42 percent from the fourth quarter of fiscal year 2003, ended Jan. 31.

Kip McClanahan, the company's CEO, described the growth as encouraging and noted that despite mounting losses, TippingPoint plans to redouble its efforts in the intrusion-prevention marketplace in the years ahead.

According to McClanahan, the first-quarter loss included a total of nearly $1.6 million in stock-based compensation for first-quarter 2004, fourth-quarter 2003 and first-quarter 2003.

FIRST VIRUS TO TARGET 64-BIT ARCHITECTURES IS FOUND
Security firms discovered the first virus that targets PCs running 64-bit versions of Microsoft's Windows operating system.

Symantec and Network Associates have captured samples of Rugrat.3344, a virus that uses Thread Local Storage structures within the operating system to execute itself.

Antivirus firms were quick to point out that Rugrat is not spreading, but is actually what's called a proof-of-concept virus"malware designed to demonstrate vulnerabilities and the ability to mount an attack. It doesn't spread from machine to machine like a true worm.

Rugrat infects IA64 (Intel Architecture 64) executables and files in the same folder that contain the virus, as well as associated subfolders.

Symantec and Network Associates suspect that the author of Rugrat is the same individual who crafted other proof-of-concept viruses in the Chiton family. Six variations of Chiton have been discovered so far, each of which demonstrates a new vulnerability within Windows.

SUN, FUJITSU STRENGTHEN TIES
In a move that Sun Microsystems Chairman and CEO Scott McNealy deemed an "acceleration" of a 22-year partnership, Sun and Fujitsu last week entered a joint development pact that will see the vendors merge their Solaris and SPARC-based server product lines by mid-2006.

The new hardware portfolio, code-named Advanced Product Line (APL), will replace Sun's Sun Fire and Fujitsu's PrimePower server lines. During the transition period leading to the APL introduction, the two companies will jointly distribute each other's SPARC/Solaris product lines. Once APL is available, both companies and their channels will sell the new line of servers.

McNealy said the deal greatly increases sales opportunities for SPARC/Solaris servers. Perhaps more important, the partnership also will shave R&D costs from Sun's microprocessor business. The APL project, which will make use of next-generation SPARC IX chip technology from Fujitsu, will replace UltraSPARC microprocessor development at Sun. UltraSPARC plans have been in limbo since April, when Sun killed its UltraSPARC V and Gemini next-generation UltraSPARC projects.

Solution providers applauded the expanded Sun-Fujitsu partnership, saying they hoped trimmed R&D costs would help speed Sun's return to profitability. Sun has had 12 straight quarters of year-over-year revenue decline.

INTEL, AMD ADD TO THEIR PROCESSOR LINES
Intel and Advanced Micro Devices each unveiled new sets of processors, with Intel launching a new lineup of mobile processors and AMD taking the wraps off four 64-bit chips for the desktop.

Intel said it was shipping new Mobile Pentium 4 processors for desktop replacement notebooks, as well as a new, lower-cost mobile Celeron M processor. The Mobile Pentium 4 processors, based on Intel's Prescott processor, range in clock speed from 2.8GHz to 3.2GHz and include Hyper-Threading technology and a 1-Mbyte Level 2 cache. The new mobile Celeron M processor has a clock speed of 1.5GHz and 512 Kbytes of Level 2 cache. It also runs at a lower core voltage than other Celerons, which Intel said will reduce power consumption and heat.

Pricing on the new Intel chips ranges from $134 in 1,000-unit quantities for the Celeron M to $294 in 1,000-unit quantities for the 3.2GHz version of the Mobile Pentium 4.

Meanwhile, at the Computex show in Taipei, Taiwan, AMD unveiled the Athlon 64 3800+, 3700+ and 3500+. It also introduced the Athlon 64 FX-53 chip, which AMD said it's targeting at the gaming space.

Pricing ranges from $500 in 1,000-unit quantities for the Athlon 64 3500+ to $799 in 1,000-unit quantities for the Athlon 64 FX-53.

HP INTRODUCES SUB-$500 COLOR LASER PRINTER
Hewlett-Packard unveiled new imaging products and alliances to push color digital imaging into the home and small-business markets.

Leading a host of new imaging products is the HP 2550 Color LaserJet with an estimated street price of $499, according to HP. The company said the product is the first color laser printer in North America priced at less than $500.

HP also introduced the Color LaserJet 4650 with an estimated street price of $1,799. The 4650 is an inline printer targeted at the SMB market.

HP also introduced new scanners and all-in-one products to help spearhead what Vyomesh Joshi, HP's executive vice president of its Imaging and Printing Group, said "is the year digital color goes mainstream."

In addition, HP unveiled a broad set of new or expanded imaging alliances with Adobe Systems, Apple, Microsoft and Quark.

HP estimates that the office color printing market is about $7.1 billion today and is expe-cted to grow by 20 percent to $10.2 billion by 2006.

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