2002 kicks off

Welcome to the first issue of 2002, a year that promises significant changes and one that will accelerate the convergence of IT and telecommunications. To all my readers, thank you for staying with me during 2001; I hope 2002 is a successful year for all of you.

[VIDEO]The successful bid by Comcast for the control of AT&T`s broadband business in a deal valued at $32 billion to create a new entity called AT&T Comcast, HP`s continuing battle to acquire Compaq and the never-ending Department of Justice and Microsoft saga dominated the international world of IT and telecommunications during the last six weeks.

At home, the possible delay in the awarding of the licence for the SNO and the sell-off by government (TransNet) of its 20% stake in M-Cell took much of the local headline space.

• we saw good year-end (15 months) figures from Unihold (revenue and earnings up);
• a full-year loss from Dectronic (revenue also well down);
• a nine-month loss from Acuity (revenue also down);
• interims from Streamworks, following disposals and prior to de-listing from the JSE;
• Fintech was de-listed, having been absorbed into Altron;
• Spicer shares were suspended;
• MB Technologies successfully completed an issue of shares for a cash deal;
• Crux and Idion Technology Holdings issued profit warnings; and
• the JSE has advised that unless Bryant Technology and Prada Technology submit their annual financial statements by 4 February 2002, their shares will be suspended and possibly terminated.

[Local]

Other local news included:

• California-based NCD may open an assembly plant in SA for its thin client devices;
• the announcement by ICL SA that it intends to start its own ISP next year;
• the formation of TallyCom, a subsidiary of Tally that will be managed by Tarsus Technologies;
• the appointments of Leslie Boyd as chairman of Datatec and the appointment of other non-executive directors, and Hugh Goble as MD of PDQ Convergence;
• the appearance of Centratel, the re-named Siltek Telecomms division under MD Michael Aitken, who has teamed up with the Ellerine Brothers together with financial help from Brait Merchant Bank and aided by David Hilewitz of V&A Capital;
• the name change of Ixchange to FrontRange Limited;
• Prism`s mothballing of Eclipse, its e-procurement product;
• the change in the government`s requirement for empowerment partners in the SNO from 30% down to 19%;
• the agreement by Comparex to acquire the entire shareholding of PQ Africa Holdings;
• the listing today of CCI Holdings, the restructured Y2Ktec;
• the abandonment of the talks re the possible investment of Eskom Enterprise in the Mount Kenya consortium, a possible bidder for a share in Telkom Kenya;
• the resignations of PA Springett, chairman of Global Technology and RJ Khoza, chairman of Unihold;
• the appointment of JW Butler as chairman of Unihold;
• the sell-off by government of its 20% stake in M-Cell for $475 million; and
• the closure of VerticalNet`s South African office.

• we saw the name change of VA Linux to VA Software;
• the sell-off by Alcatel of its stake in Thomson Multimedia;
• the creation of a new unit by Cap Gemini to house some of its low-end IT service activities;
• the announcement from Lockheed Martin that it intends to withdraw from the telecoms market;
• the sell-off by Telecom Italia of its stake (27%) in Auna, Spain`s second largest telecoms group;
• the announcement that ExciteAtHome would cease all operations at the end of February, with the UK operations closing just before Christmas;
• the combining of the chip-making businesses of Alpha Industries and Conexant Systems into a yet-to-be-named company;
• the filing of a law suit against Linux software start-up, Lindows.com, re its unreleased Lindows product;
• the possible link-up of 11 of the Japanese semiconductor makers including Hitachi and NEC;
• the name change of USA Digital to Avix Technologies;
• the rescue by Alchemy Partners, the UK-based private equity firm, of the Cedar Group;
• the sell-off by IBM to Sanmina-SCI of most of its desktop PC manufacturing operations and its NetVista desktop manufacturing operations in the US and Europe; and
• the announcement by Eastman Kodak that it will form a new company, Appairent Technologies, based on patented wireless technologies from its R&D labs.

Nasdaq`s year-end re-balancing of the Nasdaq 100 index was not good for technology companies.

Paul Booth, MD, Global Research Partners

Furthermore, the nine US states holding out on the Microsoft settlement seem to be looking for the port of Microsoft Office to Linux and other rival operating systems. Microsoft has asked for a four-month delay of new proceedings in the anti-trust trial, but this has been denied; and the judge overseeing more than 100 private lawsuits against Microsoft delayed approval of a $1.5 billion settlement until later this month.

Additionally, look out for the fate of Global Crossing, which is bordering on the verge of bankruptcy; the possible take-over of Canadian-based CGI Group by French IT Services company, Thales Information Systems SA; the possible investment by SK Telecom in Korean ISP Onse Telecom; the possible bankruptcy of ISP Globix; the fate of The IT Group, which is facing a significant restructuring; the outcome of the status of European Telecom, following the suspension of its shares on London`s AIM market; the outcome of the discussions between Hynix Semiconductor and Micron Technology; the fate of Czech Republic`s Cesky Telecom following the receipt of bids from Deutsche Telekom, Orange and several others; and the fate of Futuremedia, following the termination of the discussions re its acquisition by another UK-listed company.

[International]

Other international news included:

• the appointments of Muzaffer Akpinar as CEO of Turkcell, Michael Armstrong as chairman of AT&T Comcast, Leigh Belden as president and CEO of Verilink, Paul Birch as president and CEO of Geac Computer, Roger Blethen as chairman of LTX, Gary Bloom as chairman of Veritas Software, Pierre Bonelli as president of Groupe Bull SA, Patrick Courtin as chairman and CEO of SANgate Systems, Robert Dutkowsky as president and CEO of JD Edwards, Mike Edelhart as president and COO of Zinio Systems, Jim Farmer as president of Xenos, John Floisand as CEO of Rogue Wave Software, Charles Fote as president and CEO of First Data, Jean-Louis Gassee as president and CEO of Computer Access Technology, Michael Gullet as CEO of Arc International, "Bill" Lee as CEO of Digital Video Systems, John Lewis as president and CEO of Knowledge Networks, Edmund Ludwig as president and CEO of Optelecom, William McGlashan as CEO of Critical Path, Les McNeill as president and CEO of Novare, Don Mitchell as chairman of FSI International, Peter Murphy as president and CEO of Epic Data, Nandan Nilekani as CEO of Infosys Technologies, Patrick O`Neal as president and CEO of Sento, John Palmieri as president of Computer Resolutions, Patricia Russo as president and CEO of Lucent Technologies, John Salowski as president of VHS Network, John Scanlon as CEO of Asia Global Crossing, John Schwarz as president and COO of Symantec, Ben Verwaayen as CEO of British Telecom and Harold Wagner as chairman of Agere Systems;
• the resignations of Michael Armstrong, chairman and CEO of AT&T, John Caldwell, CEO of Geac Computer, Francis Declercq, CEO of KeyWare Technologies NV, Gregory Grodhaus, CEO of Inrange Technologies, Brian Gunn, CEO of Nettec, Mali Kuo, CEO of Digital Video Systems, Marc Lassus, chairman and founder of Gemplus, Narayana Murthy, CEO of Infosys Technologies, Antonio Perez, CEO of Gemplus, Patricia Russo, president and COO of Eastman Kodak and Geoff Unwin, CEO of Cap Gemini Ernst & Young;
• the deaths of Thomas Gonzales, one of the co-founders of Commerce One, and Chester Koo, chairman of GigaMedia;
• the retirement announcements of Charles Dimick, chairman of DDi, Bobbi Heyel, president of Connex International, Gerald Levin (from May 2002), CEO of AOL Time Warner, Martin Malone, president and CEO of DDi Europe, and Edward McVaney, founder and CEO of JD Edwards; and
• job loss announcements from Adobe, Aetna, Agere Systems, Applied Materials, AT&T, Bell South, British Telecom, Cap Gemini Ernst & Young, CDI, Comdisco, Cordiant Comms, CyberOptics, CyberSource, Forrester Research, Gadzoox Networks, I-Link, ICL, IDT, Iomega, KPN Telecom, Lam Research, Lockheed Martin, Merant, Motorola, Net2Phone, NTL, Oracle, Pacific Century CyberWorks, Pixelpark, Previo, QRS, Qwest, SAP, Scient, SignalSoft, StarBase, Supercom Ltd., Sykes Enterprises, Tech Data, Telekomunikacja Polska, Telework Systems, ValiCert, Verizon and Vodafone.

We saw excellent figures from Riverstone Networks (back in the black) and Total Systems.

Good numbers were recorded by AIT, City Telecom (HK) (back in the black), DVT, GFI Informatique SA, Global Payments, Gtech, Impreso, Infosys Technologies, Interactive Systems Worldwide, InterImage, ISoft, Intermagnetics, Sage, Seagate (back in the black), Synopsys (back in the black), SysComm International (back in the black - just), TEC-Networks and Ulticom.

Satisfactory results were posted by Aprisma Management Technologies (back in the black), Cognos, Geac Computer (back in the black), International Electronics (back in the black0, JD Edwards, Northgate Information Solutions (back in the black), OnSpan, Pace Micro, Resources Connection and Staffware (back in the black).

Mediocre returns came from Accenture, ADDvantage Technologies Group, Adobe, Cable Design Technologies, California Amplifier, Comtech Telecomms, CSI, Esterline Technology, IDT, Integral Systems, Jabil Circuit, Merant (but back in the black), Oce NV, OMG Plc., Oracle, Photronics, Planit Holdings, Plato Learning, Printronix, Progress Software, Rambus, Rational Software, Tektronix, Wallace Computer Services, Volt Information Sciences and Workflow Management.

Very poor results were posted by Comverse Technology, En Pointe Technologies, Lawson Software, Manchester Equipment, New Horizons and Sierra Systems (but back in the black).

Losses came from 365 Corp, 3Com, Actinic, ADIC, Aehr Test Systems, Anacomp, Analytical Surveys, ATI Technologies, ATNG, ATSI Comms, AVX, Broker Technology Group, Cedar, Centennial Comms Group, Ciena, CMGI, Comdisco, Covista Comms, Cree, Cybertel Comms, Datatec Systems, e-SIM, Eidos, Electro Scientific Industries, Engage, Entegris, Epic Data, ESI, FSI International, Gladstone, Globix, HEI, i-documentsystems Group, IDT, IFX, Image Systems, iMagicTV TV, Infinite Graphics, Interland, Internet Commerce, Intraware, Knowledge Management Software, Liberate Technologies, Manugistics, MCK Comms, Merix, MGI, Micron Technology, Mondas, National Semiconductor, Net Nanny Software, Optical Cable, Palm, Patsystems, Peerless Systems, Perle Systems, PNC Telecom, PPT Vision, Red Hat, Remec, Research In Motion, RF Monolithics, Robotic Vision Systems, Saba Software, Sand, SoftNet Systems, Solectron, Sorrento Networks, Spectrum Control, Stratos Lightwave, Supercom, Tanisys Technology, Tibco Software, Verity, Workstream, Xenos and Zata.

Other financial news included share buy-back announcements from Avery Comms, Cole Computer, EDS, Infonet Services, Inrange Technologies, Matsushita Electric, Neon Systems, PLATO Learning and Varitek.

There was also profit warnings from 724 Solutions, Altera, Anadigics, AOL Time Warner, AT&T, Avaya, BMC Software, Boston Comms Group, Brush Engineered Materials, Bsquare, Cap Gemini Ernst & Young, ChipPac, Computacenter, CoorsTek, Corel, Corillian, CryptoLogic, DMC Stratex Networks, Esterline Technology, FiberMark, Financial Objects, Frontstep, Gateway, Gtech, Guardian IT, HNC Software, IDT, IKOS Systems, Intershop Comms AG, Jabil Circuit, JDS Uniphase, Juniper Networks, LightPath Technologies, Logica, Lucent, Macromedia, MapInfo, Mercury Computer, MIPS Technologies, New Horizons Worldwide, Nortel Networks, Northgate Information Solutions, OpenWave Systems, Pace Micro, Parametric Technology, Peregrine Systems, Philips, Plexus, Pomeroy Computer Resources, Printronix, QRS, Qwest, Sierra Wireless, Sprint, Sykes Enterprises, Topcall International AG, Transaction Systems Architects, Transmeta, TriQuint Semiconductor, Universal Electronics, ValiCert, Versata, Viasystems, Vignette, Vina Technologies, Zygo and Zytronic.

Share split announcements came from Avaya (reverse), Avery Comms (reverse), iExalt (reverse), International Wireless (reverse) and Kana Comms (reverse).

There was also the creation of Imagistics, the spin-off from Pitney Bowes, which has now started trading; good IPOs from Nassda (chip software) and NetScreen Technologies; a satisfactory IPO from Lawson Software; and expected IPOs from China Unicom (late in 2002), TTM Technologies and Xchanging.

Additionally, Marine Comms, the French Telecomms services and IT company, has filed for liquidation, Global Comms, Motient, Startec and USinternetworking have filed for Chapter 11 bankruptcy protection; ACT Manufacturing has filed for Chapter 11 protection for reorganisation purposes; and Anacomp and Covad Comms have emerged from Chapter 11 protection.

Locally

Aqua Online (+45.8%)
Cape Empowerment Trust (-50%)
Crux (-42.9%)
Datatec (+51%)
E-Data (-67.7%)
ERP.com (+40%)
Explorer (-50%)
Global Technology (+60%)
UAM (-60%)
Vesta (-50%)

Internationally

AXS-One (+97%)
Comdisco (+156.8%)
ConMat Tech (+133.3%)
Covad Comms (+192.7%)
eXcelon (+78.1%)
Intraware (+152.9%)
Legato Systems (+85.5%)
SONICblue (+130.8%)
UnitedGlobalCom (+216.4%)
Vixel (+93.7%)

Nasdaq`s year-end re-balancing of the Nasdaq 100 index was not good for technology companies, with 13 departures and only five new additions. The losers were 3Com, Ariba, Broadvision, CMGI, CNET Networks, Level 3 Comms, Metromedia Fiber Network, Inktomi, McLeodUSA, Novell, Palm, Parametric Technology and RealNetworks.

The newcomers were CDW Computer Centers, Charter Comms, Integrated Devices Technologies, Symantec and Synopsys.

The local technology stocks also took a battering in 2001 with Dimension Data topping the list with a share price drop over the year of 76%, followed by Datatec at 51% and M-Cell at 50%. However, the bright spot belonged to Mustek with a rise of 100% over the 12-month period.