building and marketing the computers, mobile phones and other gadgets that use them. But recent (timid) developments in electronics suggest this industry is aware of its problems.
Mitsubishi Electric announced last week that it would stop making dynamic random access memory (DRAM) chips. This week, Fujitsu said it would expand a deal with Siemens, a German electronics firm, to share more of the cost burden in its computer business. Fujitsu was also said to be in talks with AMD, an American semiconductor firm, in an effort to streamline its flash-memory business.
Mitsubishi's move is part of a phase of narrowing corporate focus that has been under way for a while. Despite a decent knowledge base, established brands and a captive, domestic market for consumer electronics, the big five have failed to bear the pain of a global downturn in the market for chips. The cyclical downturn has ended any pretensions of closing the gap with DRAM rivals in South Korea, Taiwan and elsewhere. Fujitsu and Toshiba have quit computer DRAMs altogether. Hitachi and NEC combined their DRAM UNITS in a joint-venture, Elpida, in 1999 - into which Mitsubishi has now merged its DRAM operations in the hope that a combined Japanese firm can succeed.
The big five must now sort out the rest of their corporate sprawl. A good place to start would be their other chip units, which make many types of mediumand high-end semiconductors. Given the huge research and other capital costs involved, why are all five firms pushing ahead in this business? "They're not global leaders in any of the things they do any more," notes Graeme Knowd, an analyst at Warburg in Tokyo. But, he says, if the big five can combine some of their remaining semiconductor teams, and focus on design while looking for ways to outsource production, the industry has a chance of emerging with two or three firms that excel In high-value-added, customised chips.
There is also a good case for combining some consumer-electronics businesses, which are falling behind global rivals and specialised Japanese competitors such as Sony and Panasonic. Fujitsu's mobile phones, for examplelag those of Japanese rivals; its personal computers are uninspiring; and it is not one of the country's leaders in semiconductors. Its best bet is to team up with other firms in some areas and concentrate instead on domestic software consulting, where it does fairly well.
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The deal that Fujitsu announced with Siemens on October 8th to expand their existing partnership by sharing more of the cost of parts for some common computer models is small compared with the overhaul Fujitsu really needs. An agreement with AMD could help a lot more, if it allows Fujitsu to pass more of its chip business to a more promising foreign partner. It might even inspire the rest of the big five.
Glossary
captive, n - находящийся под контролем cost burden, n - накладные расходы
customized, a - соответствующий требованиям заказчика emerge, v - появляться
excel, v - превосходить
gadget, n - устройство, приспособление joint-venture, n - совместное предприятие lag, v - отставать, запаздывать
merge, v - поглощать, сливаться overhaul, n - подробный осмотр, ревизия quit, v - покидать, оставлять
share, v - делить(ся), разделять
streamline, v - ускорять, рационализировать succeed, v - достигать цели, иметь успех
Vocabulary in context
Find in the text the words with the following definitions
1.a person or a company that competes with another:_______________________
2.of or inside a particular country:______________________________________
3.a business agreement to buy or sell goods or provide a service:_____________
4.a number of companies, sometimes involved with different products, joined together and run as one large company:_______________________________
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5.to increase the size, number, volume, or scope of:_____________________
6.a statement offered as explanation or justification:__________________
7.a fall in sales or profits:_________________________________________
Reading comprehension questions
1.Why is Japan called the land of electronic conglomerates? 2.What are the “big five”?
3.What developments in electronics suggest that this industry is aware of its problems?
4.Have the “big five” failed to beat the pain of a global downturn in the market for chips?
5.What deal did Fijitsu announce on October 8th, 2002?
Text 13 RAY OF LIGHT FOR TECH INVESTORS
Handheld computer maker Palm and software giant Oracle have lifted technology investors' spirits with better than expected results. Palm, the world's biggest manufacturer of pocket-sized computers, posted a profit of $3.5m for the second quarter of the financial year, bouncing back strongly from a $25.2m loss one year ago. The figures, which reflected aggressive cost cutting, were sharply ahead of Wall Street's expectations. Many analysts had expected the firm to remain in the red.
There was encouraging news also from Oracle, the world's number three software maker, which managed to beat its own sales and profit forecasts despite continued cutbacks in technology investment by major corporations. Oracle said profits after tax for the second quarter of the financial year came in at $535m, or 10 cents a share. The figure was 2.5% down on the same period last year, but still comfortably outstripped the 8 to 9 cents a share the company had previously forecast. Oracle's sales also fell, but the year-on-year decline - at 2.9% - was more moderate than the expected 4-7% drop.
The figures cheered technology investors, many still smarting from news of a surprise increase in quarterly losses at semiconductor giant Micron Technology. Oracle shares were up 3.5% to $10.63 by the close. The stock jumped a further 67
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cents to $11.30 in after-hours trade. Palm shares also gained strongly, rising 12% in after hours trading despite news that the firm's sales had fallen nearly 9% on the year to $261m.
The two firms' share prices bucked wider market trends, with both the Dow Jones industrial average and the tech-oriented Nasdaq closing lower. However, the firms' weak sales figures are likely to be interpreted as a sign that a true tech sector recovery is still some way off.
With consumer and corporate spending remaining weak, most firms that have managed to increase profits in recent months have done so through cost controls rather than organic sales growth.
Glossary
cheer, v - ободрять, поощрять
cutback, n - снижение, сокращение, уменьшение decline, n - падение, снижение, спад expectation, n - надежда, ожидание
forecast, n - прогноз, предсказание
lift smb`s spirits, v - поднимать чье-либо настроение, ободрять кого-то loss, n - потеря, урон, убыток
outstrip, v - превосходить, обгонять, опережать profit, n - доход, прибыль
previous, a - предыдущий, предшествующий ray of light, n - луч света
recovery, n - подъем, оживление, восстановление
remain in the red, v - предчувствовать приближение опасности, беды shares, n, pl - акции
smart, v - страдать, причинять жгучую боль tax, n – налог
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Vocabulary in context
Find the words in the text with the following definitions
1.an addition or enlargement in size, extent, quality, etc:_____________________
2.the buying and selling of goods, services, currencies or securities:____________
3.lacking determination or decisiveness; ineffectual:________________________
4.to estimate or predict some future event or condition:______________________
5.extremely large:___________________________________________________
6.the amount of money paid or changed for goods or services:________________
7.money lost in a business deal; a financial defeat:_________________________
Reading comprehension questions
1.What are Palm and Oracle?
2.What are the profits of Palm?
3.What are the profits of Oracle?
4.What are the figures of their shares prices?
5.What can be interpreted as a sign of a true tech sector recovery?
Text 14 |
WAL-MART: $199 PC SELLS BRISKLY |
By dropping software from Microsoft and avoiding "Intel inside," retailer WalMart Stores is offering a $199 computer it says is a hot seller on its Web site, attracting novices looking for a way onto the Internet as well as high-end users wanting a second box. The promise of a PC replacement — slimmed down to surf the Web and carry out limited tasks — has long tantaliz ed the tech world but failed to generate many sales, especially as prices of name brand computers have slid.
The Wal-Mart machines are full-fledged, if low-powered, computers, but they are not loaded with Microsoft's Windows software or the best known microchips — meaning that the average user will not get exactly what he or she is used to. "It is going to be harder to get people to adopt that sort of stuff" since most consumers
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want Windows, concluded Roger Kay, a PC analyst at International Data Corp. research group.
Although the Wal-Mart machine has a slower microchip than more expensive computers, rival machines may not surf the Web much faster, since the speed of the Internet connection is usually the bottleneck in online tasks, said Rob Enderle, an analyst at competing research group Giga. "It is awfully hard to beat this for the price point," he said.
As Wal-Mart heads into its first holiday season offering the $199 machines, it says sales are already exceeding expectations. "What we're finding is largely tech enthusiasts buying these items, but we've also seen some individuals, as well as businesses and some schools," said spokeswoman Cynthia Lin. She declined to quantify sales, although knowledgeable sources put them in the thousands of units per month.
The machines, manufactured by Microtel Computer Systems, aim to provide an experience similar to Windows by using operating systems based on the free Linux system. They support high-speed Internet (though the service itself is not included) and have a CD drive that can read music and data disks, but not record them. They also have relatively small hard disk drives of 10 gigabytes. There is no modem, floppy disk drive, or monitor, and the VIA Technologies microchip that is the brains of the machine may not be known to users familiar with Intel's Intel inside marketing campaign and Intel rival Advanced Micro Devices.
The same hardware system with Windows and a modem costs $100 more, while companies like eMachines, which specialize in low-end computers, offer $399 machines with Windows, low-end chips from AMD or Intel, a bigger hard drive and extra hardware such as a modem or CD-write drive. Gary Elsasser, vice president of technology at eMachines, said that consumers wanted to be able to run any software and find computer help easily. Linux makes that hard to do. "When you switch operating systems, millions of programs no longer work. The person next door can't help you," he said. EMachines annually sells about 400,000 computers at $399 each, Elsasser said.
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Freedom — from Microsoft — is a chief reason tha t consumers would buy a Linux-
based machine, said Jason Spisak, marketing director of Lycoris, a nine-person startup and one of two companies supplying Wal-Mart with an operating system for the $199 machines. The other, also Linux-based, is Lindows. Spisak says his Desktop/LX software is modeled to look like Windows XP. "We've basically taken this as far as you can go without being prosecuted," he said.
With new word processing and other office software on the way, and based on the open office system successfully developed by Sun Microsystems for Windows, Linux and other operating systems, Lycoris machines are good for light word processing, Web surfing and e-mail, which is 90 percent of what people use computers for, Spisak said. "These (computers) are getting closer to an appliance," that will satisfy new users and power users wanting a second machine, he argued. "We're looking at a consumer who has less sophisticated needs," he said.
Glossary
appliance, n - прибор, приспособление argue, v - спорить, аргументировать as far as, adv - насколько
average, n - средний bottleneck, n - узкое место
brisk, a - живой, быстрый, оживленный carry out, v - выполнять
exceed expectations, v - превосходить ожидания
full-fledged, a - с полным набором функциональных возможностей novice, n - начинающий, новичок
quantify, v - определить количество retailer, n - розничный торговец replacement, n - замена, замещение rival, n - конкурент, соперник tantalize, v - дразнить
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Vocabulary in context
Find the words in the text with the following definitions
1.providing or being provided:__________________________________________
2.to browse (the web):________________________________________________
3.the exchange of items for money:______________________________________
4.a product or group of products or a service; with a particular name:___________
5.high in price:______________________________________________________
6.the amount of money for which something can be bought or sold:____________
7.highly complicated or developed:_____________________________________
Reading comprehension questions
1.What is the cost of the new PCs offered by the retailer Wal-Mart Stores?
2.What are the technical specifications of the Wal-Mart machines?
3.What can you say about the sales of these PCs?
4.What is the chief reason of the consumers to buy a Linux-based machine?
5.What computer companies are mentioned in the article? What are the technical specifications of their machines?
Text 15 |
HIGH-SPEED INTERNET ACCESS |
“The future is already here - it's just unevenly distributed," a science-fiction writer, William Gibson, once joked. High-speed, or “broadba nd”, connections to the Internet are a case in point. Although there is a widespread view that broadband is the future of the Internet, figures compiled by the OECD reveal an astonishing variation in the adoption of broadband across the rich world. South Korea leads the table with 9.2 broadband connections per 100 inhabitants, compared with 2.25 in America and a measly 0.08 in Britain, despite the popularity of the Internet in all three countries.
The irony is that, while the world's telecoms firms spend a fortune building thirdgeneration mobile-phone networks, even though they are not sure that anybody wants them, in many parts of the world they seem unable or unwilling to provide broadband
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connections at reasonable prices, even though customers want them. There is plenty of demand for broadband links, which come in two main types: digital subscriber-line (DSL) connections" and cable-modem connections. DSL uses special hardware to turn old-fashioned telephone lines into high-speed data links; cable modems transmit data over the fibre-optic and coaxial cables used for television. Both technologies are capable of delivering data much faster than dial-up modems, and both offer the advantage of "always on" connections.
The problem lies in the supply. According to Merrill Lynch, an investment bank, Deutsche Telekom, Germany's telecoms incumbent, signed up 630,000 subscribers for DSL last year, but managed to connect only 135,000 of them. In Britain, it can take months to get a DSL connection, and cable modems are unavailable in all but a handful of areas. In America, independent DSL providers such as Covad and Rhythms are struggling; NorthPoint, another provider, went bust in March.
So why is broadband more readily available in South Korea and Canada than in other countries, even those with "large numbers of Internet users? According to Sam Paltridge, at the OECD, several overlapping factors affect whether or not broadband takes off. The biggest is the degree of competition in the market, which governments have generally encouraged by allowing the construction of rival infrastructure to the telephone network, usually in the form of cable networks. But the existence of rival infrastructure is not enough. Ford Cavallari of Adventis, a consultancy in Boston, points out that cable companies can make more money selling high-margin services, such as premium TV channels, to their subscribers than they can from offering cable modems. Meanwhile, the telephone network is usually in the hands of state-owned (or formerly state-owned) monopoly that is reluctant to cannibalise corporate highspeed Internet access evenues by offering cheaper broadband. The result can be that nothing happens – as in Ireland, for example. In Sc andinavia, says Mr Paltridge, the cable infrastructure is often owned by incumbent telecom firms. The resulting lack of competition may explain why no Scandinavian countries are in the top six for broadband penetration, despite having unusually high rates of Internet usage.
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To get things moving, regulators in most OECD countries realised that it was necessary to "unbundle the local loop" - in plain English, to force incumbents to give other firms access to the copper wires running into homes. New entrants could then spring up to offer DSL over these wires, and so encourage the cable companies to compete by offering cable modems. Canada was one of the first OECD countries to Sunbundle its local loop; Britain was one of the last. This is one reason for the vast discrepancy in the availability of broadband between the two.
Yet unbundling is not sufficient to get broadband going either, since it is dependent on the co-operation of the telecoms incumbent. In both Britain and America, incumbents have hindered adoption of DSL by being deliberately unhelpful towards new entrants, many of which have given up or gone under. Regulators in America can impose only puny fines, which incumbents regard as a price worth paying to keep the market to themselves.
Another problem is a shortage of technicians to install DSL connections. Some countries where the incumbent is keen on broadband, notably Belgium, have got round this through the use of "plug-and-play" equipment that subscribers can install themselves. This equipment is starting to become available in other countries, too, including France and Germany. In South Korea, the incumbent, Korea Telecom, took a different approach and trained an army of 2,500 technicians to install. South Korea is a special case in other ways, too. Its population is highly concentrated, which made the construction of rival infrastructure cheap and easy. The result was fierce competition between cable and DSL providers: over 2m new DSL connections were installed during 2000 alone.
In short, the wide variation in the adoption of broadband is the result of several overlapping political, regulatory and technical factors. There is no simple way for governments to copy South Korea, much as they would like to. All they can do is to unbundle the local loop and keep a close regulatory eye on the behaviour of their telecoms incumbents, which can drive or delay the adoption of broadband pretty much as they choose. And in Europe, says Mr Paltridge, there is evidence that the old guard is finally yielding to change. The OEDC' s latest figures show that, in the first quarter of
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