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Tuesday, 18 January 2005 19:00

News Roundup 18 January 2005


Virtual travel agents are virtual no more: US Market Trend

After years as US online-only travel company brands, Expedia and will begin selling vacation activities the ld fashioned way, with both companies opening kiosks and small retail shops in major tourist areas this month.

The New York Times reports (17 Jan) that the companies have said the change would help them reach customers who had not yet purchased travel services online and would strengthen the companies' bonds with hotels, where many of the kiosks will be located. The new locations will also help the companies get a much bigger slice of the lucrative vacation activities business, selling services like helicopter tours, luau outings and show tickets. The activities market has no dominant player, with most tourist destinations relying on regional companies to market local tours and services.

The NYT says that analysts have observed that the kiosks underscore the latest trend among online travel agencies, which have been trying in recent years to evolve into travel retailers, rather than simply Web sites that quote published air and hotel rates and pass orders on to suppliers.

The paper says the moves come as travel sites fight to maintain their profit margins. Airlines have cut the commissions they pay to travel agencies and now market their own sites more aggressively. Hotels are also directing customers to their own sites by reducing the number of discounted rates available to online agencies. Analysts have estimated that kiosk sales generate profit margins of about 20 percent, compared with 10 percent to 18 percent profits for hotel sales online and 5 percent to 10 percent margins for rental cars.

According to the paper, Expedia clearly hopes that the kiosks will attract new customers to the online business as well.

Companies to compete to run .Net domain

The New York Times, in a 17 January reeport, says that as long as the internet runs smoothly, few people think too much about its workings - but later this month, the system's underpinnings will become a topic of debate when rival companies publicly bid to run .net, one of the internet's most popular domains.

The paper says this will be the first time that VeriSign's .net franchise will be challenged. While .net is not as ubiquitous as .com, it has more than five million registered domain names, which translates daily into millions of page views, 155 billion e-mail messages and some $US1.4 million in commercial transactions, according to VeriSign.

In the US, about 40 percent of government domains allow access through .net, including the White House, the United States Senate, Homeland Security agencies and the Social Security Administration, making it a vital internet transportation layer,according to Verisign.

The NYT says that so far, at least three companies in addition to VeriSign have indicated that they plan to vie for the franchise, which expires on 30 June - they are NeuStar, a company that runs .biz, and Afilias, which manages .info. A nonprofit firm in Frankfurt, Denic eG, which manages Germany's eight million registered .de domain names, has also indicated that it is planning to bid.

The paper reports that selecting the domain manager is the job of the Internet Corporation for Assigned Names and Numbers. But Icann finds itself in a ticklish position because it has publicly clashed with VeriSign over the company's proposed Site Finder service, which would redirect queries from inactive or defunct Web addresses to a search engine supported by advertisers signed up by VeriSign.

The NYT report says that if VeriSign loses, it would not be the first internet registry switch. In early 2003, VeriSign, as part of its deal to keep control of .com, agreed on competitive bidding for the management of .org and .net. The Public Interest Registry, a nonprofit group, won the bidding for .org. VeriSign is lobbying actively to hold onto its .net stewardship, however, lining up written support from major players including Microsoft and IBM.

Market watchers have said that because of its effect on the United States economy, deciding on the .net manager is the biggest decision Icann has had to make so far.

Radio broadcasters looking at digital music stores

The New York Times/Reuters report (16 Jan)) that radio broadcasters are considering technology and business models that may soon allow listeners to click, listen and buy the tunes they hear on their favorite radio stations.

The paper reports that in the US, top radio conglomerate Clear Channel Communications, technology companies and burgeoning satellite radio companies are aiming to launch such services within 18 to 24 months.

The NYT and Reuters say that XM Satellite Radio filed several patents made publicly available at the end of December, which outlined early plans to develop music downloading services and devices, providing a window into how the radio industry plans to capture a larger piece of the $US32 billion music business.

The paper says that traditional radio companies face lagging advertising sales growth as they continue to grapple with a loss of listeners to Apple iPods and satellite radio services that provide higher fidelity broadcasts uninterrupted by commercials.

Satellite broadcasters, on the other hand, aim to differentiate themselves from free radio. At the same time, the NYT says that analysts say companies like XM and Sirius Satellite Radio could be on a collision course with Apple.

Apple and satellite radio companies have one thing in common: They are attempting to control the way consumers buy and listen to music. Both industries control methods of distribution and the hardware, unlike traditional radio companies, concludes a market research company.

The paper says that Clear Channel is in the process of converting most of its 1,200 radio stations across the US to new digital high-definition radio broadcast equipment, a move that positions it to debut new services and products in the years to come. The redport says that the new technology will not only allow traditional radio broadcasters to deliver CD-quality radio sound as well as song title and artist data over the air on a new type of receiver, but also will allow it to deliver up to eight more digital channels over the same amount of radio spectrum.

Motorola gains on Samsung

The New York Times/Reuters (17 Jan) report that Motorola may have gotten a Christmas present from rival cell phone maker Samsung, with the Asian company slow to beef up its product portfolio in time for the holiday season, giving Motorola's newest feature-rich phones an edge.

The paper reports that the South Korea-based Samsung Electronics has just reported a slump in fourth-quarter profit, with its margins hurt by a price war with Finnish rival Nokia, which analysts said may be recovering lost ground.

However,more important to Motorola, which typically doesn't compete on price, Samsung has been losing favor with some service providers, who demand a constant flow of new features to maintain consumer interest, reports the NYT.

In the fourth quarter alone, Motorola unveiled about 20 new phones worldwide in an attempt to sharpen its design edge. At the top of the list was the company's ultra-slim Razr V3, heavily marketed in recent months. The model is billed as the world's thinnest flip phone, weighing in at 3.35 ounces.

In contrast, according to the NYT, analysts have criticised Samsung's sluggishness in moving new phones to market and predict the company will be plagued with problems until they get their new phones out.

Motorola's share of the global handset market stood at 13.4 percent at the end of the third quarter, according to Gartner Dataquest, placing it third worldwide. Nokia, the market leader, had roughly 30.9 percent, while Samsung had 13.8 percent.


TiVo faces threats

The Mercury News/AP report (16 Jan.) that TiVo has been synonymous with digital video recording since it pioneered the industry five years ago, controlling an estimated one-third of the market in 2004, but that the company's "lofty perch is now beginning to crumble".

According to the paper, competition in the growing and lucrative industry is intensifying as cable providers, satellite operators and consumer electronics companies push ahead with models of their own, giving consumers more choices while threatening to significantly blunt TiVo edge.

Analysts say that Tovo is facing a very, very difficult year this year and it will be increasingly difficult for the company to sign up new subscribers.

Many agree that TiVo's service remains the best of breed, with its easy navigational controls and advanced search and record functions, and its subscribers account for one in three of the estimated 6.5 million US. households with digital video recorders.

However, the paper says the small company is now playing in a land of giants, faced with a mass market of consumers looking for convenience and low prices, and even with its latest innovations, TiVo will find it difficult to compete against the clones of deep-pocketed cable or satellite operators who can afford to subsidise hardware costs and already have tens of millions of customers on their rosters.

The NYT says that a snapshot of how TiVo is being attacked from many fronts emerged earlier this month at the International Consumer Electronics Show, when a slew of rivals introduced their latest products.

News Corp.'s DirecTV, a longtime partner whose satellite customers accounted for about two-thirds of TiVo's subscribers by the end of October, said that it will introduce later this year a new media receiver that employs the DVR software of its sister company, NDS Group. DirecTV is also expected to continue offering TiVo-based recorders at least through early 2007, when its contract with TiVo ends.

Scientific-Atlanta, a provider of cable boxes whose DVR models made up almost 40 percent of its third-quarter shipments, announced the first deployment of its multi-room DVR to some Time Warner Cable customers.

EchoStar's Dish Network unveiled a DVR receiver that also will have 100 hours of space for video-on-demand content, a fast-growing revenue generator for cable companies. The satellite provider also will introduce a line of portable media players that can connect to the DVRs and download recorded content for playback on the go.

Motorola, another cable box provider whose DVR models are now shipping at a frenzied rate to Comcast and others, has plans to deploy more souped-up versions later this year, including one using Digeo's widely praised Moxi platform.

And, says the NYT., set-top boxes that will compete with TiVo are moving well beyond basic DVR functions: Telecommunications titan SBC Communications announced a deal with electronics company 2Wire to build a box to handle music, photographs and Internet video downloads.

Finally, Hewlett-Packard introduced a media hub using the Linux operating system, a machine that includes a DVR and two high-definition TV tuners, enabling recording of two channels simultaneously.

World is going WiFi - fast

The Mercury news reports (17 Jan) that there are now more than 50,000 WiFi hotspots around the world, with London leading the pack with more than 1,100 hotspots, according to

Hotspots are physical locations where wireless connections to the internet are offered.

The paper says that JiWire recently issued a report tracking the world's top cities and countries for WiFi hotspots. San Francisco ranked ninth on the top 10 cities, with 382 hotspots. San Jose has 156 locations. The United States tops the list of WiFi countries, with more than 21,000. California is the leading state, with 3,848 -- more than double No. 3 New York's 1,546.

According to the paper, the way hotspots have popped up in every city, the updates are bound to be frequent, and the number of hotspots around the world has jumped more than 40 percent percent from July, when JiWire listed 35,000 locations.

The company predicts a 100 percent growth of hotspots in 2005, with hotels and other location types that naturally cater to the business traveler expected to be large contributors to this rapid growth.

HP to upgrade Itanium servers

Hewlett-Packard is set to announce an upgrade of its line of corporate servers, designed around the newest versions of Intel's Itanium chip for high-performance computing.

The US computer and printer giant also plans to announce that it has sold $US1 billion worth of computer hardware, software and services based on the Itanium over the past 18 months, reports the Mercury News (17 Jan.).

With these announcements, HP hopes to convince investors and customers of its commitment to a computer chip architecture that has not taken off as its creators had initially planned. Last month, Intel and HP severed their alliance that spanned over a decade, during which HP and Intel jointly developed a new computing architecture. Intel is hiring away several hundred engineers from HP who worked on the chip designed for high-performance computing and will retain total control of the design of future chips.

Also last month, reports The Mercury, HP said it would invest $3 billion over the next three years on development of products related to Itanium and to further build up an ecosystem of new software applications to run on the 64-bit chip, which is not compatible with older Intel chips.

The paper says that HP's newest Integrity servers are based on the latest version of the Itanium 2 chips, code-named Madison, and offer customers up to 25 percent improvement in performance. The servers start at prices of $4,119 for an HP Integrity rx1620 server and go up to $185,252 for an Integrity Superdome, for high performance, big number-crunching applications.

Rivals Sun Microsystems and IBM are ready to pounce on any HP customers that are still undecided about future plans for their corporate computing environment, according to the NYT., with Sun claiming that it has already won over 175 HP customers, worth over $200 million in revenue, with its ``HP Away'' program, targeted to disenfranchised HP customers.

Sony unveils 'Centrino 2' notebook family

The Register reports (17 Jan) that Sony UK has just unveiled its latest Centrino notebook, two days before the technology on which it's based will be formally launched by Intel.

The online news service says that probably explains why the Japanese giant is so frugal in listing the new Vaio FS series' processor specs., although it had let slip that the machines will use Intel's 915M chipset family, formerly best known by its codename, 'Alviso', and essentially a mobile version of the desktop Pentium 4 chipset 'Grantsdale'.

The Register also reports that Intel is expected to announced 'Sonoma', the second generation of its Centrino platform this week, and last week, Toshiba announced its own Sonoma-based notebook line-up.

New JV to flog phone service to the UK

In the UK, a new company - Applicahome - is to employ a 1,000-strong telesales workforce to sell its phone service to residential customers in the UK.

The Register reports that a joint venture between IT and outsourcing services company Allserve Systems, UK telco applica and ex-NTL MD Mike Bandeira - will target 450,000 customers a month by calling them direct.

The report says that on offer from Applicahome is a residential phone service which it claims is between 40 and 60 per cent cheaper than BT, and the company is aiming for 200,000 punters within two years - which would enable it to generate £80m in revenue. It says its aim is to be the fastest growing player in the market space within the first 12 months, and one of the top three triple play resellers in the UK within two years.

Ingram Micro unites Europe

Ingram Micro Europe is bringing together back office functions for all its European businesses to save money and improve efficiency.

The Register reports (17 Jan.) that the Ingram Micro Pan-European Group will provide services for three businesses - Ingram Micro Components Europe, Ingram Micro Networking Services and Ingram Micro Supplies Europe. The three businesses will continue to work as normal but, according to The Register, should benefit from reduced costs for back office functions. The three divisions will continue to trade under their existing names and logos.

Ingram Micro Europe said the formation of the new pan-European group was part of Ingram Micro's overall effort to optimise processes and reduce costs, and was an important step in the further development of a central business model was already very successfully in place for components products for many years.

Siemens mobile arm for sale or closure

Siemens will close its mobile handset division unless it can find a last minute buyer, according to the Sunday Telegraph, reports The Register (17 Jan.).

The Register says The Telegraph reports that Siemens is the fourth largest handset maker by market share, but has struggled to make a profit, with the mobile division losing €140m in the fourth quarter of 2004.

The paper reports a final decision will be announced at the Siemens annual general meeting on 27 January.

It also reports that NEC has denied it is interested in buying the division, and that Chinese manufacturer Ningbo Bird also denied interest.

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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.





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