June 28, 2001

June Firewall Report

Prices keep dropping on computers and components, yet sales are not what they used to be, no matter what Gateway, Dell, and Compaq leasing offer. Many lessors report their customers are up-grading instead of leasing new systems.

Fry's Electronics has AMD 1.2 and 1.4gig CPU with motherboards very inexpensive. Intel has a 1.7gig now being sold in new computers. It requires more expensive memory chips, quite a bit more expensive than AMD, plus tests show the AMD 1.4 is 4134 fast compared to the Intel 1.7 4237. http://www.cpuscorecard.com/

Apple Power Mac G4 733 is 2826. Once the fastest and most expensive, they are today slow in comparison and still expensive. Their time has come and gone. Their move is to start selling their own computers from their own stores, something they did when they first started, but got caught in slow moving inventory, and thus new management was brought in. Evidently they are going to repeat history. When they introduced the newer model, they had too many old models still in inventory as once a leader in the personal computer field, they have become a "niche."

If you want to find out if your customer has an obsolete system, go to the obsolete computer museum, go here: http://www.obsoletecomputermuseum.org/index.html

If you want to learn more about computers, technically, go here: http://www.millbury.k12.ma.us/~hs/techrepair/

If you want to see if the computer price is in line, or the components prices are in line, go to: http://www.pricewatch.com/

Fry's Electronic on the West Coast has the AMD Athlon 1.3ghz CPU and motherboard for $249. IBM 76.8gb ultaMDA/1000 8.5ms for $267. DVD recorders are $77 for your computer. There are consumer DVD recorders now under $1500 ; most likely $695 by the end of the year. VHS appears to be going the Beta way, soon to obsolete, being replaced by the ability to record television and movies on DVD. Sony has DVD digital cameras and camcorders on the marketplace today.

The real big news this month:

International Business Machines scientists proclaim that they have developed the world's fastest silicon transistor, a development that promises to hold down the costs of high-speed communications devices.

IBM said it has built a transistor that runs at 210 gigahertz, which is twice as fast as current communications chips and more than 100 times faster than the Pentium 4, the Intel microprocessor that powers state-of-the-art personal computers.

( We were talking about 1.4 speed above, compared to 210 here-This blows Moore's theory of speeds doubling out the window, as a major threshold has been crossed. The increased speed will give a tremendous boost to major computer software innovations, thus the reason Microsoft is moving toward video and sound to be ahead of the next generation where we will be talking instead of using keyboards just as they do on science fiction shows ).

The fact that the transistor is made of silicon rather than expensive and exotic materials such as gallium arsenide or indium phosphide means that high-speed communications chips can be made with cheap material on existing equipment.

"It's a little, tiny chip, but it creates a gigantic step as far as technological advancement," said Frank Dzubeck, a Washington-based telecommunications analyst. He said such performance could ultimately result in wireless phones that could handle enough bandwidth to deliver video.

( We are getting closer to the Star Trek Communicator with sound, video, e-mail, computer connection all in a unit you can wear on your lapel and give vocal commands. We will see this before 2010 as common as digital telephones are today. )

IBM has a long history of building sophisticated chips for its own use, but in 1995 it started selling its expertise to outside companies. It is now the biggest producer of chips called application-specific integrated circuits, designed by customers with IBM's help and then built by IBM. Many of its biggest customers are makers of communications equipment, including Alcatel SA, Nortel Networks and Cisco Systems.

While other companies have started to promote SiGe technology, IBM has been developing it since 1989 and "clearly" has "the most manufacturability and repeatable process," said Paul Cunningham, director of business development for Sierra Monolithics Inc. a Redondo Beach, CA, company that designs circuits for high-speed optical switches. "I don't think anyone else is close to 210 gigahertz. We're pretty excited," he said.

Meyerson of IBM said very high-speed communications chips made of silicon mean that wireless technology could bring huge amounts of data into the home. That would avoid having to lay fiber cables to homes. This ends the DSL market and will affect the cable TV market also. Price and convenience. Carl Moberg of Streakwave now installs wireless cable in 30 mile radius connection for extremely low prices. .

Meyerson said one of the most significant impacts of the new development is that chip designers will be able to get improved performance even when they can no longer make ever-thinner lines on the silicon chips. "People argue about when it will happen, but as a physicist I know there are physical limits." Moreover, the bipolar SiGe transistors can be easily integrated onto a logic chip, such as a microprocessor, unlike other materials.

Microsoft is no longer supporting Windows 95, and is moving away from Windows 98, although it is still one of their best sellers. Instead of lowering prices for older software, Microsoft is announcing a price increase across the board.

This price increase is aimed at the larger industrial users who buy mass licenses.

The real target is getting the market ready for its first non-Windows consumer product, which is an extension of Windows 2000, an extension of their NT product. All of this aimed for video and sound use.

Although the system will not be released until Oct. 25, Microsoft and a group of major PC manufacturers are now marketing "Windows XP Ready PCs" that meet the system requirements. They hope consumers will buy the new computers with the existing version of the Windows system then upgrade to XP in the fall.

Some PC makers, such as Compaq, plan to include coupons for discount upgrades. Others, such as Gateway, have already begun including the coupons. Compag has moved away from its own Alpha chip, for this reason. The XP software will be tailored to work best on servers that run on Intel's Xeon and Itanium chips.

If the manufacturers and software developers can pull it off, perhaps the leasing industry along with the lessee and consumers will have a Merry Christmas. I know it is too early to be talking about this holiday, but with four Saturdays in December before December 25th , including an open Monday for Christmas eve last minute shopping ( Xmas is on Tuesday ), the electronic industry may pull us out of economic doldrums. They have the technology in place. Will the consumer be attracted to the new speeds, abilities, and software? In my opinion, marketers have gotten lazy and stupid over the last few years with jerk ads. Amazon, Pet.com, among others, turned many buyers off. The economy was at a point that all you need to do was hint it was "new," and buyers paid over retail to get it "now." With smart marketing, it can be a very merry Christmas for us all.

We hope you have a Happy Fourth of July.

Kit Menkin