Samsung Semiconductor announced on Monday that it has renewed its contract with Microsoft to supply memory chips for the company's Xbox game console, which contains 64MB of high-speed double-data rate (DDR) SDRAM.
Such long-term supply agreements are particularly valuable in the turbulent memory-chip industry, which saw manufacturers selling dynamic random access memory (DRAM) chips below cost for much of last year just to keep factories open.
Risto Puhakka, an analyst at semiconductor research firm VLSI Research, said that even though memory prices are starting to recover, it is to Samsung's advantage to lock in orders now.
"The long-term contracts present a number of benefits in that suppliers can plan much more efficiently," he said. "You're not in the position of dealing entirely with the spot market."
Microsoft has sold 1.5 million Xbox consoles from mid-November, to the end of 2001. Microsoft projects worldwide shipments of 4 million to 6 million units for its 2002 fiscal year, which ends June 30.
News source: CNet News
Such long-term supply agreements are particularly valuable in the turbulent memory-chip industry, which saw manufacturers selling dynamic random access memory (DRAM) chips below cost for much of last year just to keep factories open.
Risto Puhakka, an analyst at semiconductor research firm VLSI Research, said that even though memory prices are starting to recover, it is to Samsung's advantage to lock in orders now.
"The long-term contracts present a number of benefits in that suppliers can plan much more efficiently," he said. "You're not in the position of dealing entirely with the spot market."
Microsoft has sold 1.5 million Xbox consoles from mid-November, to the end of 2001. Microsoft projects worldwide shipments of 4 million to 6 million units for its 2002 fiscal year, which ends June 30.
News source: CNet News
However AOL is highly anxious - as shown in leaked strategy memos last year - at losing its Net franchise. Microsoft has shown every indication that intends to drain the oxygen from future web transactions, and in order to so, wants to squeeze AOL off the PC desktop. AOL has already touted Linux in web appliances and appreciates that a box giving access to AOL content and instant messaging doesn't need to be a Wintel PC.
The trouble is, buying RedHat is the most convoluted and most expensive way of buying such an alternative to Wintel. For example, see Robin Miller's review the $799 OEone Linux PC/appliance. OEone is a modest outfit, but proves that you don't need to own any assets except a little imagination and a few good programmers: the OEone UI is based on Mozilla's XUL toolkit, an asset AOL has helped nurture.
Expensive mergers (and Red Hat would indeed be one, with its $1.6 billion market cap) tend to appeal to the big swinging dicks in corporate planning, and look no further for the likely suspect for this rumour. As the Post's Alec Klein, who wrote the merger story, wrote here in December, ex-AOLer Bob Pittman was passed over for the CEO post in December. This might be his way of showing the AOLers can still punch their weight.
Only of one of those three areas is likely to be attractive to AOL. The other two, if it needs them, can be acquired though partnership, rather than spending cash. AOL is if anything, withdrawing from enterprise business software, with its ownership of the iPlanet venture (the server half of the Netscape acquisition) elapsing in March. Most of the employees were transferred to Sun last year.
Whatever. If this expensive nuptial takes place, it certainly adds a little rebel chic to the AOL-TW Death Star.
But let's not forget boys and girls, that Linux would be serving but one purpose: providing a pipe to AOL-TW's content, TV shows and its news plugs about that content. A survey of US network TV news last year indicated that a third of morning broadcast 'news' stories were promotional features, and 20 per cent of all stories were plugs for the owners' other products (now sourced below). They were, as we saw with the Time front-page splash for the new iMac, thinly-disguised advertorial.
In other words, it may be a Linux computer, but a Linux computer that's solely serving a gigantic information and entertainment congolmerate. And that will be enough to make folk nostalgic for Clippy the Paper Clip.
Remember that for all its vices, Microsoft has next to no media content, and once you're away from your computer, The Beast has very little power to make to your daily cultural intake any more dismal and bland; while that's the entire raison d'etre of the AOL-Time Warner "synergies". We're baffled that anyone should find that absorbing a successful Linux enterprise company to achieve such ends is anything to celebrate. Maybe they should be spending less time with their computers?
View: Robin Miller's review View: Washington Post's story
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