WinInfo Daily UPDATE, April 23, 2002

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April 23, 2002—In this issue:


  • William H. Gates III, Star Witness for the Defense
  • Graphics Cards will Support Corona Video, Longhorn Technologies
  • Xbox Creator Bails
  • Compaq Sells 2 Million iPAQs


  • Cast Your Vote for our Reader's Choice Awards!
  • Get Valuable Info for Free with IT Consultant Newsletter


  • See this section for a list of ways to contact us.

(contributed by Paul Thurrott, [email protected])


  • Microsoft Chairman and Chief Software Architect Bill Gates came to court yesterday bearing a meticulously prepared, 155-page testimony, complete with charts, graphs, and graphics. He was polite in court, even chatty, laughing and smiling when appropriate. He was also in command of the facts and often presented detailed, technical explanations during his direct answers to questions. He was, in other words, nothing like the person we saw in video deposition clips almost 4 years ago. He was also nothing like the real Bill Gates, a fiery and spirited competitor who harbors little patience for people less intelligent than himself.

    Yes, Gates came to Washington yesterday, providing a star-studded interlude in the middle of Microsoft's antitrust remedy hearings, in which nine nonsettling states and the District of Columbia seek to impose harsher remedies on the company than the US government and nine other states have agreed to. The drawn-out affair will last 2 or 3 months, and its conclusion—however it turns out—will be bathed in controversy because the judge overseeing the case also has to determine whether she'll enter Microsoft's government settlement as law.

    Gates' appearance was supposed to be the most interesting part of the hearings. But in some ways, his performance was the most predictable. The Gates testimony was almost too well prepared, and it read as if an army of lawyers and public relations people had written it, which probably was true. On the stand, Gates sat erect, answered questions quickly and decisively, and knew his facts. Gates was somewhat hobbled by having to stick to the letter of Microsoft's "Chicken Little" defense, in which the company claims that the nonsettling states' request to create a modular Windows version is impossible and would irreparably damage the company and its products. Gates made some good points, including a request that any court-approved remedy be clearly written, with terms such as middleware concisely defined.

    "Microsoft is committed to complying fully with court orders, including any remedy that may be ordered in this case," Gates said. "We can do that only if the remedy is clear as written and its terms feasible."

    Despite the absence of theatrics, Gates did make several interesting comments in his testimony and under cross-examination yesterday, including:

    • Microsoft cloned the functionality of other company's products, including those of Netscape Navigator, AOL's online service, and certain interactive TV software. Gates said this behavior was acceptable as long as Microsoft didn't improperly obtain the source code to the product it copied or otherwise infringe on intellectual property rights.
    • The company purposefully designed Microsoft Office so that its Web page output would render correctly only in Internet Explorer (IE). "Allowing Office documents to be rendered very well by other people's browsers is one of the most destructive things we could do to the company," Gates wrote in his testimony. "This is a case where Office has to avoid doing something to destroy Windows."
    • Gates said that a Windows version hobbled by the nonsettling states' requirement would set the product back to "1992-era functionality" and freeze it there, giving competitors a chance to continue to add features to their products and surpass Windows. This action would kill the market for Windows, Gates said, and require Microsoft to lay off half the 15,000 employees who work on Windows.
    • Requiring Microsoft to release source code to competitors as requested under the nonsettling states' plan would amount to an "historic theft" of intellectual property. "This \[plan\] is a dream come true for somebody who wants to clone Windows," Gates said, noting that AOL Time Warner, Gateway, Novell, Oracle, and Sun Microsystems, specifically, were eagerly awaiting such a code release.


  • Support for the next generation of Windows Media technology, code-named Corona, got another boost today when major graphics-card makers announced that they will directly support Corona video playback in the silicon of their next-generation products. ATI and NVIDIA will build support for Corona directly into their video cards, enabling high-definition video playback on Windows-based PCs.

    "Windows Media Corona is validation that Microsoft shares our goal of advancing the PC as an entertainment device," said Dan Vivoli, vice president of marketing at NVIDIA. "Corona is designed to harness the performance power of our graphics processor units (GPUs), resulting in a seamless home-theater-quality experience on any desktop or notebook PC."

    Corona is the technology behind version 9 of Microsoft's Windows Media technologies, which will ship late this year. Corona will include server components, such as the Windows Media Services that will ship in Windows .NET Server, and desktop components, such as Windows Media Player (WMP), as well as new audio and video codecs and various tools. Corona's audio and video codecs supply a 15 percent to 20 percent performance and quality improvement over the previous versions.

    ATI and NVIDIA also announced support for DirectX Video Acceleration (DXVA), a 3-D interface that enables video processing, including Windows Media Video (WMV) decoding and de-interlacing, on graphics hardware, freeing the PC's CPU for other tasks. DXVA will provide the basis for the UI in Longhorn, the next Windows release, which will use hardware 3-D rendering, when possible, to speed up and enhance the UI.


  • In another sign of impending doom for Microsoft's Xbox gaming console, Seamus Blackley, who cocreated the unit and its marketing strategy, has suddenly left the company to pursue other projects. Many people considered Blackley the heart of soul of the Xbox; he was a prominent public figure who boosted his technological baby at almost every Microsoft event during the past 2 years. But a recent string of bad news for the console, punctuated by much lower-than-expected sales, exposed a major flaw in the Xbox strategy. Blackley originated and pushed that strategy, of course.

    "\[Blackley\] has left Microsoft to pursue other opportunities," a Microsoft spokesperson said. "We value his contributions."

    Blackley's exit comes just 1 day after Microsoft announced that it will probably miss its yearly Xbox sales target by almost 40 percent. According to company insiders, debate centered on whether the Xbox should be an all-in-one home-media center that offers DVD movie playback, digital video recording (DVR) functionality, a home gateway, Internet-connection sharing, and other features out of the box, in addition to game playing. But Blackley felt that the Xbox had to be a "pure" gaming system, and he was able to push his vision through. Since the holiday season ended, however, Microsoft has started working on the next Xbox, which will probably resemble an all-in-one unit more than it does the current games-only console. Microsoft moved the UltimateTV hardware team, which previously worked on interactive TV and DVR software, into the Xbox division in January.


  • Compaq announced this week that its popular iPAQ Pocket PC line has sold more than 2 million units, making it the most popular Windows-based handheld computer on the market and the company's fastest-selling computer product ever. Compaq credits the iPAQ's success to its wide range of functionality and popularity with corporations, one market that Palm hasn't been able to crack. However, the iPAQ still trails market-leader Palm by a wide margin: Palm has sold more than 17 million handheld devices.

    "During the first quarter, iPAQ unit shipments increased 14 percent and revenues increased 18 percent from the previous year," said Compaq Executive Vice President Peter Blackmore. "But the more important measure is the tremendous 'pull-through' effect as the iPAQ drives revenues several times that with related hardware and services. Again and again, Compaq's ability to deliver innovative handheld technology solutions is proving a key to winning large, multiyear tenders to deliver complete, integrated solutions for global companies and other major organizations."

    Despite its lofty position, Palm's share of the handheld market continues to shrink. The company ended 2001 with 39 percent of the market, compared to 50.4 percent in 2000. However, its 5 million sales in 2001 are greater than the combined sales of all Pocket PC devices, including models from Casio, Compaq, Hewlett-Packard (HP), and other vendors.



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