A five-week wrap-up

Welcome to the first issue of Booth`s Bites for 2004, which covers a five-week period. I hope this year will be a good one for all of you.

The new anti-trust case against Microsoft brought by Real Networks and the acquisition of ACCPAC, a majority-owned subsidiary of Computer Associates, to Sage, which recently took over Softline, dominated the international world of IT and telecommunications during the last five weeks.

The Vodacom issues re Nigeria, the Telkom wrangle with Orion Telecom and the second national operator news dominated the local ICT headline space.

Paul Booth, MD, Global Research Partners

At home, the Vodacom issues re Nigeria, the Telkom wrangle with Orion Telecom and the second national operator (SNO) news dominated the local ICT headline space.

Additionally, the JSE has advised that there are audit opinions that contain emphases of matter on the annual financial statements of Bryant Technology and EC-Hold.

* We saw a full year and quarterly loss from Spescom Software (Spescom`s US operations - full year revenue slightly up but quarterly revenue well down);

* Satisfactory interim figures from Y3K (revenue marginally down but back in the black - just);

* Mediocre half-year figures from Eureka Industrial (revenue and earnings both down);

* An interim loss from Casey (although revenue up more than double);

* A re-stated set of annual financial results from Pinnacle (net profit down about 50% from previous figures);

* A change of control announcement from Casey;

* Rights issues from Global Technology (debt conversion) and Sekunjalo Investments; and

* A notice formally announcing the proposed suspension and de-listing of Maxtec`s shares following a bid from a group of black staff.

Other local news included:

* GS Telecom opened a local office;

* Econet`s submission of a claim for damages re its legal challenge to Vodacom, which is seeking to enter the Nigerian market via Econet Wireless Nigeria;

* The challenge by Orion on Telkom, which it claims is abusing its monopolistic position;

* Arivia.kom withdrew its AST acquisition attempt, although it still may be interested in "certain" parts;

* The appointments of Ken Modise as CEO of RentWorks, Chin Kin Onn as CEO of Prism`s Asia Pacific operations and Tami Sokutu as non-executive chairman of Elexir;

* FrontRange Solutions opened a Chinese office in Shanghai;

* A change of control at Edutech;

* The launch of Xantium Technology Holdings;

* The closure of all Casey`s divisions with effect from 31 August 2003 and the retrenchment of all the staff;

* The resignations of Lemmy Khumalo MD of Casey and Cheslyn Mostert as non-executive chairman of Elexir; and

* The communications minister announced that 26% of the SNO shareholding will be allocated between the two short-listed consortia, CommuniTel and Two Consortium, and the remaining 25% will be warehoused until a suitable buyer is identified.

New strategic business alliances were announced between First Technology and Space Age Technologies; and Grintek Telecom and Cybercom International.

* Deloitte Touche Tohmatsu is no longer considering the sale of its consulting and IT services business;

* Frontline Comms changed its name to Provo International;

* Getronics sold off its minor stake in Caridata;

* New legal battles arose for Microsoft as Mythic Entertainment sued for alleged illegal use of its corporate name and RealNetworks went to court over monopolistic practices in the digital media software space;

* Perot Systems bought out HCL Technologies` stake in their joint venture;

* Ster Project SA bought out EDB Business Partner AB`s stake in their joint venture;

* Fujitsu and Sumitomo Electric formed a joint venture involving advanced semiconductor device operations;

* Spanish-owned Acciona SA sold off its stake in Vodafone for EUR727 million;

* UK-based document management company INVU swapped its Nasdaq listing to one on London`s AIM; and

* IBM could face Security Exchange Commission charges over alleged inflated earnings.

New international strategic partnerships were announced between Avici Systems and Nortel Networks; Covad Comms and Broadwing; ESS Technology and Hansung Elcomtec; JDA Software and Henry Schein; Komag and Trace Technology; and Microsoft and Eclipsys.

Additionally, look out for the re-organisation at HP that may include a merger of its Enterprise Systems Group and the HP Services Group; DoCoMo`s sell-off of its stake in its joint venture with AOL; Critical Path`s fate as it struggles to survive; and the possible acquisition of AT&T Wireless by SBC Comms.

International acquisitions, mergers, joint ventures etc - There are a significant number (>90) despite the holiday period.

Other international news included:

* The appointments of Roland Acra as president and CEO of Procket Networks, Stephanie Burns as president and CEO of Dow Corning, John Cole as president and CEO of Hytek Microsystems, Salvatore Iannuzzi as non-executive chairman of Symbol Technologies, John Kelley as chairman of McData, Nick Konidaris as president and CEO of ESI, Michael Liss as chairman of FiberNet, Ted Marr as CEO of Resilience, Kip McClanahan as CEO of TippingPoint Technologies, Lakshmi Narayanan as chairman and CEO of Cognizant Technology Solutions, William Nuti as CEO of Symbol Technologies, Clifford Pollan as CEO of Lumigent Technologies, James Scullion as CEO of Comnetix, Ross Smith as president of Quantum3D, Philip Tomlinson as CEO of TSYS, Frank Wilde as CEO of Tarantella, Gene Warren as president and CEO of ACT Teleconferencing, Troy Woods as president and COO of TSYS and Ed Zander as chairman and CEO of Motorola;

* The resignations of Richard Bravman as CEO of Symbol Technologies, Ted Bruce CEO of DPAC Technologies, Patricia Higgins as president and CEO of Switch and Data, John McHale as CEO of TippingPoint Technologies (remains as chairman), CJ Meurell as president and COO of Aehr Test Systems and Susan Swenson as president and COO of Leap Wireless International;

* The retirements of Kumar Mahadeva as chairman and CEO of Cognizant Technology Solutions and Jack McDonnell as chairman of McData; and

* Job loss announcements from 3Com, 3M, AOL, AT&T, AVX (factory closure), BellSouth, Borland, Danka Business Systems, Earthlink, eLoyalty, IBM, Instinet Group and Zhone (plant closure).

We saw excellent* figures from California Amplifier, Certicom (back in the black), Comtech Comms, Red Hat, Research in Motion (back in the black), Versus Technologies (back in the black) and YP.Net.

Very good* numbers were reported by Applied Signal Technology, ATI Technologies, Jabil Circuits, Merix (back in the black), and Verity.

Good figures* were recorded by Adobe, ADIC (back in the black), Amtech Systems (back in the black), Bouygues, CDT (back in the black), Cognos, Entegris (back in the black), Frisco Bay, Infosys Technologies, ISoft Group, LanVision Systems, Paychex, Printronix (back in the black), ProactiveNet, Progress Software, SAIC, Sensytech, Take-Two Interactive Software, Tektronix, Uti and Volt Information Sciences.

Satisfactory* figures were posted by Best Software, CSI, Financial Models (back in the black), Global Payments, Gtech Holdings, InterVoice (back in the black), Manchester Technologies, Oracle, Park Electrochemical (back in the black), Photronics (back in the black), RF Monolithics, Spectrum Control, Tibco Software (back in the black) and Workflow Management.

Mediocre* returns came from CMGI (but back in the black) and Manatron; while very poor results* came from Micron Technology (but back in the black).

Losses* came from 3Com, Aehr Test Systems, AirGate PCS, American Technology, Anacomp, Analytical Surveys, Anite, Ciena, Conolog, Covista Comms, Delphax Technologies, Elecsys, ESI, FSI International, Hauppauge Digital, ID Data, IDT, Interactive Systems Worldwide, Internet Commerce, Intraware, Laser Technology, Lawson Software, Manugistics, Metron, NaviSite, NHC, Norstan, Nu Horizons Electronics, palmOne, PalmSource, PPT Vision, Quantum, Remec, Robotic Vision Systems, Saba Software, SatCon Technology, SCO Group, SI Technologies, Solectron, Sonic Foundry, Sorrento Networks, TippingPoint Technologies, Visual Data, Warthog and Wegener.

Other financial news included analyst upgrades for Altera, Applied Materials, Avaya, Brocade Comms, Brooks Automation, Cisco, DoubleClick, Ericsson, NCR, Nortel Networks, Open Text, PeopleSoft, Redback Networks, RF Micro Devices, Sanmina-SCI, Vitesse Semiconductor and Xilinx; analyst downgrades for 3Com, Accenture, Alcatel, Amdocs, BellSouth, Hyperion Solutions, PanAmSat, Pinnacle Systems, Terayon Comms and Ultimate Electronics; and private placement of shares by LanOptics and Serena Software.

There were also share offerings from Enterasys, Infineon Technologies, Merix, Pixology, Softbank, Transmeta, WJ Comms and ZiLOG; share buy-back announcements from ASA International, Dobson Comms, InVision Technologies, Keithley Instruments, McData, and Vodafone; and shareholders rights plans from interWAVE and Winland Electronics.

Meanwhile, positive results/profit warnings were posted by Activision, Andrew, Arris, Atmel, Danka Business Systems, Datatec Systems, DSP Group, ESS Technology, Getty Images, ICOS Vision Systems, Nokia, Siebel Systems and Xybernaut; and negative results/profit warnings (often veiled) came from Atos Origin, Cap Gemini Ernst & Young, Ciena, Enterasys, Equifax, Extreme Networks, Gateway, Honeywell, Ibis Technology, Identix, Interland, JDA Software, KPN, Misys, Mobility Electronics, Planar Systems, Sprint, Take-Two Interactive Software, Technitrol, Ultimate Electronics, Verizon Comms, Verso Technologies, Vital Images and Wavecom SA.

There were also share split announcements from Adtran, Frontline Comms (reverse), Grupo Iusacell (reverse), iBasis (reverse), INSCI (reverse), TACT (reverse), Telesoft (reverse) and Winland Electronics; an excellent IPO from software maker Kintera; a very good IPO in London from INVU; a satisfactory IPO from Knology; and planned IPOs from Atheros comms (chipsets), Cherokee International, China Netcom, Chinadotcom Mobile Interactive, Cingular Wireless, Civica (UK software and services provider to the public sector), Marchex (e-business software), Motive (service management software), Salesforce.com (CRM business), SPS Spinco (Motorola`s semiconductor unit spin-off) and Tencent Technology (Chinese instant messaging provider half-owned by Naspers).

Additionally, DA Consulting Group has filed for Chapter 7 bankruptcy protection for it and its US subsidiary; CTC Comms Group, DDi and Redback Networks have emerged from Chapter 11; and Verestar, a global provider of satellite and fibre network solutions, is to re-organise under Chapter 11 protection.

Locally

Control (+26.7%)
Cycad (+50%)
Datatec (+21.4%)
Dimension Data (+22.6%)
Global Technology (+50%)
IST (+23.2%)
Jasco (+18.5%)
Spescom (+25.3%)
Synergy (+30.8%)

Internationally

AXS-One (+77.8%)
Exabyte (+75%)
FiberMark (+81.3%)
Pegasus Comms (+84.5%)
Red Hat (+69.1%)
Robocom Systems International (+69.6%)
SEMX (+100%)
SGI (+75.6%)
Silverline Technologies (+92.7%)
Tarantella (+144.6%)

In terms of indices, Nasdaq was up 7.7% (it reached a level last week not seen since before mid-2001) and the JSE was up 8.1% over the last five weeks.

As is usual during the latter part of December, the Nasdaq 'updated` the companies that comprise the Nasdaq 100 index. From a technology perspective, ATI Technologies, Intersil, Lam Research, Level 3 Comms, Marvell Technology Group and Research in Motion were added to the index, while ADC Telecomms, Brocade Comms Systems, Ciena, Ericsson and RF Micro Devices were removed from the index.

* NB

Guidelines for the categorisation of results are as follows and are always in comparison with the equivalent period for the previous year; pro forma numbers are ignored (the terminology may vary slightly from country to country).

* Excellent: Both revenue and net income growth are in excess of 50%.

* Very good: Both revenue and net income growth are in excess of 25%

* Good: Both revenue and net income growth are in excess of 10%.

* Satisfactory: Revenue is within 10% of previous year and net income is up.

* Mediocre: Either revenue and/or net income is down.

* Very poor: Net income is less than 1% of revenue.

* Loss: A loss has been recorded.