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HP's IPOD

HP's iPod Leads Product Rush
August 27, 2004
By Michael Singer

With its enterprise division still reeling from its financial woes, HP (Quote, Chart) announced today 25 new consumer products it hopes will reinvigorate its brand.

As part of its Big Bang II Fall 2004 announcement in Florida, HP is celebrating some firsts. The company will make and market a suite of plasma and LCD flat-panel TVs, as well as a digital home theater projector. And its long-awaited version of the Apple (Quote, Chart) iPod is almost upon us.

As previously reported, HP has adopted Apple's fourth-generation iPod, which comes in 20GB and 40GB versions. HP also adopted Apple's price tags of $299 and $399, respectively, even though HP is distinguishing its digital music players from the original stark white design with the addition of some customizable casings -- or "tattoos."

HP's new lineup also includes devices to link up its version of the digital home. The company's Digital Entertainment Center manages music, movies and photos from a single device. The HP Pavilion dv1000 series Entertainment Notebook PC, with QuickPlay feature, lets consumers watch DVDs or listen to music without booting up. Rounding out HP's dream home are the four flat-panel displays, including a 42-inch HDTV Plasma, a 42-inch EDTV Plasma, and two LCD TVs (26-inch and 30-inch), on which content can be viewed.

Not to abandon its lucrative printing business, HP introduced a new 4.1-megapixel digital camera, a new toaster-sized photo printer for the popular sized 4x6-inch prints and an array of new multi-cartridge inks, cartridges, media and printers. Most of the items are ready to ship with some being held back to gauge demand.

HP CEO Carly Fiorina discussed most of the items during the Consumer Electronics Show (CES) in Las Vegas earlier this year.

"At the [CES] in January, we said the real digital revolution was not just about gizmos and gadgets; it was about making the whole system work better together," Fiorina said in a statement. "Our customers have told us they want to easily share, enjoy and preserve their personal experiences -- whether those experiences are photos, music or video."

Of the products internetnews.com looked at, very few are designed to compete directly with the likes of Dell (Quote, Chart), and fewer still are expected to show up in the enterprise outside of the small and home-office realm.

For example, the HP Instant Cinema Digital Projector ep9010 is a boom box-like device for playing and watching movies. The prototype we viewed during a briefing was attractive with its space-age curved design, but it was heavy and ran loud and hot. HP said it wanted to start off with the consumer version first before streamlining it for the enterprise. Even so, sales teams would probably love to get their hands on something like this because of its multi-media capabilities.

But HP is taking its partnerships very seriously. Siobhan O'Connor, HP vice president of brand communications for consumer products, told internetnews.com that leading brands in search of marketing opportunities have approached the company.

In addition to its deal with T-Mobile to bring Wi-Fi to Starbucks; its back-end work with DreamWorks' Shrek movies; and its partnership with Walt Disney to design its "Mission to Space" attraction in Florida, HP is open to other ways to extend its home experience beyond the home.

One idea being tested in San Francisco and elsewhere includes kiosks at Fairmont Hotel locations where tourists can rent a digital camera for the day and later print 10 of their favorite photos on HP equipment that same day.

"We're learning a lot from our partners and what kinds of experiences they are looking for," O'Connor said. "Ultimately, what we are all interested in is reaching consumers where they are."

R G V N E W S L E T T E R

SEPTEMBER 2004

Welcome to the Rockbridge Global Village, Inc. Newsletter. We have selectively found information and articles that may be of interest to our customers. We hope that you find information and topics within this newsletter interesting and useful.

Topics in this newsletter:

Google Options Began Trading
HP's Ipod Leads Product Rush
Microsoft's Next OS in 2006
VOIP Picks Up Momentum
Government Seeks Broadband Ruling Reversal

Google Options Begin Trading
August 27, 2004 By Paul Shread

Google (Quote, Chart) began trading options on Friday, and interest in the financial instruments appeared strong.

Reuters reported that more than 69,000 Google options traded on Friday, very heavy trading for options in an individual name. More than 31,000 of the trades were in calls — essentially, bets that the stock will go up — and nearly 38,000 were in puts — bets that the stock will fall.

Options don't usually begin trading in a new issue until months after it debuts, but heavy interest in Google's IPO led options exchanges to bring them to market sooner. However, because of Google's brief trading history, pricing on the options could be an inexact science for some time.

In other Google news, underwriters reportedly exercised a 2.94 million share overallotment from the IPO, adding roughly another $300 million to the $1.7 billion IPO. And Yahoo (Quote, Chart) reportedly sold much of the shares it received from Google in a settlement earlier this month.

The market rose Friday on a better than expected consumer sentiment reading and another reading of second quarter GDP that wasn't as bad as feared.

The Nasdaq rose 9 to 1862, the S&P 500 added 2 to 1107, and the Dow climbed 21 to 10,195. Volume declined to 848 million shares on the NYSE, and 1.02 billion on the Nasdaq. Advancers led 22-10 on the NYSE, and 19-11 on the Nasdaq. Upside volume was 67% on the NYSE, and 69% on the Nasdaq. New highs-new lows were 99-14 on the NYSE, and 43-35 on the Nasdaq.

PeopleSoft (Quote, Chart) rose 1% on renewed interest from Oracle (Quote, Chart).

Apple (Quote, Chart) slipped on competition from HP (Quote, Chart).

Tech Data (Quote, Chart), Novellus (Quote, Chart) and Catalyst (Quote, Chart) rose on their earnings news, while TiVo (Quote, Chart) and Intellisync (Quote, Chart) fell on their results.

QLogic (Quote, Chart) gained 5% on reports of market share gains.

And eCost.com (Quote, Chart) had a lukewarm debut on the Nasdaq.

VOIP Picks Up Momentum
By Dinesh C. Sharma
August 30, 2004

The number of U.S. Internet telephony subscribers is expected to grow to 1 million by the end of this year from 131,000 in 2003, according to a new study.

That number is expected to surge to 17.5 million households by 2008, according to the study, released Monday by The Yankee Group.

After years of uncertainty and regulatory hiccups, many telephony companies are readying voice over Internet Protocol (VoIP) technology, the research firm said. AT&T, Verizon Communications and Qwest Communications are planning to launch local VoIP services later this year. Those companies are looking to move in on the success of VoIP provider Vonage.

"These companies have the potential to capitalize on the market's momentum," Kate Griffin, senior analyst at The Yankee Group, said in a statement. "Operators that brave the uncertainty and enter the VoIP market will gain the ability to define the service and set consumer expectations."

The market researcher said cable multiservice operators will corner 56 percent of the local VoIP market by the end of next year, while share for those in the "alternative voice provider" category will drop from 66 percent in 2003 to 19 percent in 2005. Cable's push into VoIP will help it grab nearly 10 percent of the local telephony market by 2008.

Internet telephony has been fast gaining ground, because it is cheaper for both home customers and businesses. VoIP calls are placed over Internet, which free it from the government regulations and heavy taxes to which traditional telephone networks are subject.

Government Seeks Broadband Ruling Reversal
August 30, 2004 By Reuters

The U.S. government has asked the Supreme Court to reverse an appeals court ruling that could lead to heavier regulation of cable companies' high-speed Internet service.

Officials asked the high court to overturn a federal appeals court in San Francisco, which ruled that cable broadband should be classified as a telecommunications service rather than a more lightly regulated information service, the Federal Communications Commission said.

The appeal was filed on Friday by the FCC and the acting solicitor general of the United States.

"Applying taxes, regulations and concepts from a century ago to today's cutting-edge services will only stifle innovation and competition," FCC Chairman Michael Powell said in a statement Monday. "A successful appeal of this case would ultimately mean lower prices and better service for American consumers," Powell said.

The U.S. Court of Appeals for the Ninth Circuit ruled last October that the FCC should have classified cable broadband as a telecommunications service. In April the San Francisco court refused to reconsider its decision. If the FCC were to label cable broadband as a telecommunications service, cable companies would likely have to let consumers choose a rival Internet service provider unless the FCC affirmatively declared otherwise.

The FCC decided in March 2002 that high-speed Internet service from cable companies was an information service and therefore not immediately subject to requirements that rivals have access to their networks.

The Supreme Court is expected to decide by the end of the year whether to hear the government's appeal.

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Microsoft

It's Official: Longhorn 2006
August 27, 2004
By Susan Kuchinskas

UPDATED: Microsoft ended a couple years of speculation about the roadmap for the Longhorn desktop OS with an announcement today that it is targeting 2006 for release of the client.

That's a big target. To hit it, Redmond has severed key features from the next-generation client operating system, planning to deliver them separately and later. For the Windows "Longhorn" Server operating system, Microsoft is shooting for 2007.

"When we finished XP Service Pack 2, the team poked their head up and said, 'What do we need to do to ship Longhorn?'" said John Montgomery, Microsoft's director of the .Net development platform. "We took a look at customer feedback and decided that we needed to get the Longhorn release in the hands of customers sooner rather than later."

Longhorn development fell behind after Microsoft was forced to pull developers off the project to assist with getting Windows XP Service Pack 2 out the door.

Longhorn has three major components: Win FS, a file storage subsystem; Indigo, a messaging infrastructure based on a Web services-oriented architecture; and Avalon, the graphics presentation subsystem.

WinFS supposedly will marry SQLServer's database indexing capabilities with the computer file system so that users can easily save and search for a variety of file types, from photos to e-mail to documents and media. At the Windows Hardware Engineering Conference in February, Microsoft said WinFS would be a key breakthrough in Longhorn, while Chairman and Chief Software Architect Bill Gates promised a fairly capable build of WinFS for developers in 2004.

Instead, Microsoft said it would deliver WinFS after the Longhorn release, but that it should have a beta version ready when the Longhorn client is available.

Microsoft is tying Longhorn to 64-bit computing, which Microsoft believes will be ubiquitous by 2006.

In a meeting with Microsoft evangelists, company brass promised that Windows WinFX developer technologies for Windows XP and Windows Server 2003, including Avalon and Indigo, will ship in 2006. The tools will let developers write software that works on XP and Windows 2003, as well as Longhorn systems.

While Microsoft will separate development of the WinFS file subsystem, delivering it later, the engineers also made an addition: They'll make parts of the WinFX development tools for Avalon available to run on Windows XP and Windows Server 2003.

"ISVs found the WinFX programming module very compelling," Montgomery said. "At the same time, they wanted to see the reach broadened, so they could touch more systems with it."

The task is not trivial, and Microsoft will have to make some engineering trade-offs. For example, the user experience of graphics created with Avalon/WinFX won't be as snappy under XP.

"When I was briefing customers, ISVs were extremely excited," Montgomery said. "They felt it would approve adoption. Customers don't have to install a whole new operating system in order to get some of the benefits of Longhorn."

This componentization is not necessarily a bad thing, according to James Governor, an analyst with Redmonk. "I believe the majority customers will be pleased to see that Indigo and Avalon are going to be available for their existing operating environments, rather than solely tied to Longhorn."