^C^1EYEWITNESS NEWS
^CBy Richard and Lavona Rann

Apple increases connectibility:
-------------------------------
  Apple's ability to connect to IBM office systems took a boost this month with
the announcement of products by two separate companies, Northern Telecom Inc.
and 3Com Corp.  Among the advantages to large companies is access through their
IBM PCs to the Apple LaserWriter and Macintosh desktop publishing software as
well as access via Mac to IBM files.

GS Delays:
----------
  Words from inside Apple have it that the delay in stocking production models
of the IIGS is due to problems in a proprietary chip. It is not a bug in the
code; rather it is a difficulty in manufacturing.

Atari Corp. Going Public:
-------------------------
  The Atari Corporation announced last month that it plans to offer about 4.5
million shares of common stock to the public.  It expects the shares to sell
between $11.50 and $13.50. The increased capital will help Atari pay off debts,
including monies owed to former owner Warner Communications.

FCC Certifies Tandy Model 1000s:
--------------------------------
  After fining Tandy $2000 for offering the 1000SX and 1000EX for sale without
certification, the FCC awarded the 1000 line Class B certification. This allows
it to be sold for home use.

Legal Battles Include Landmark Ruling:
--------------------------------------
  Of major impact is the ruling by U.S. District Judge William Ingram that
microcode is protected under the same copyright laws that govern computer
software. The action was brought by Intel against the Japanese electronics
giant NEC. Intel alleged that NEC's V-20 and V-30 processors were exact, bit
for bit, copies of Intel's 8088 and 8086 processors. For the first time,
processor chips have been ruled to fall under copyright protection. While Judge
Ingram is still to rule on the NEC V-20 and V-30 themselves, his initial ruling
puts many clones in jeopardy of copyright infringement. 

  If the V-20 and V-30 are ruled to be copies, it will mean that the large
number of clones relying on these chips will be illegal and not importable to
the United States. The ruling is also a blow to NEC, the worlds largest chip
maker (currently number 1 because of low cost memory chips), who was looking at
the V-20 and V-30 as a way to establish U.S. market share before the upcoming
release of its in-house designed 32-bit processor chips. Regardless of the
outcome for Intel, the decision is a help to IBM in its battle with low cost
clones. Another outcome of the decision should be increased litigation against
Asian computers that may in fact delay their introduction into the U.S. and
will certainly raise the cost of doing business here. 

  A second important event is that a bill protecting the privacy of most
electronic communications was voted out of the Senate Judiciary Committee last
month. If it becomes law, it would create new civil and criminal penalties for
breaking into private communications systems. It would also establish rules for
law enforcement officials in dealing with such cases. The Electronic
Communications Privacy Act of 1986 is given a good chance of passing because it
is supported by most major manufacturers and lobbyists.

Lotus Announces CD-ROM System:
------------------------------
  One of the first applications to be put on CD-Rom was announced by Lotus
Development Corp.  The product is called Lotus Financial and is part of the One
Source system selling for $11,000 to $27,000 depending on configuration. The
CD-ROM will be used for stock performance histories to go along with 1-2-3 and
their on line services. The user can get a historical spreadsheet much quicker
from CD-ROM than he could by downloading the information.

New for Apple?
--------------
  Quietly in the September 22, "Just Heard" column in InfoWorld, a new Motorola
chip was announced. It is a 32-bit MC68030 designed for an ultimate speed of 20
MHz or twice the MIPS (million instructions per second) that Intel claims for
its 80386. It will run all current 68000 software.  The first prototype will be
available in March at $350, and it will be in full production by October with
an expected price between $150 and $200.

Mac Attack?
-----------
  Apple goes on the Mac attack by lowering prices. The Mac Plus is down from
$2,599 to $2,199, and the 512K dropped from $1,999 to $1,699. At the same time
Apple dropped LaserWriter prices $1000 to $4,999. Software for the Mac is 
coming out faster, especially in the desk top publishing field. Two new Mac 
desk top programs were introduced to compete with Aldus Corp.'s Pagemaker. 
After all that, Apple still had enough energy left to rollout the Apple II GS. 

Clones Follow in IBM's Wake
----------------------------
  "Big Blue's steam roller made a smooth, flat road for clone makers," Apple's
Gassee claimed.  In a talk to Apple's sales force last month, Jean Louis
Gassee, Apple's vice president of product marketing said that IBM's entry into
the PC market created a path for clone makers, but, he said, "Clone makers
cannot innovate."  By their very nature they are forced into a sameness.
"Better sameness hasn't got any better for a while, just cheaper." He sees IBM
about to reclaim the market place from the clones. The IBM steam roller is not
only making the smooth road; it is coming up from behind as well. IBM will 
handle the flattening of the clone makers with proprietary technology. 

  The process is beginning with the combined announcement by IBM and Intel that
they plan a joint development venture that may well end in a proprietary
version of the 80386. Since Intel is owned largely by IBM, it is not surprising
that it is the starting place. The Federal court decision to consider Microcode
under copyright protection only adds strength to IBM's move.

  IBM is reorganizing again. It is in the process of increasing its field
marketing force from 23,000 people to 28,000 by the end of 1987. It began with
the shift of 2000 management people to the sales and service force. In addition
it is believed by a number of analysts, that IBM will institute an early
retirement program to further reduce managerial ranks. Among the other
persistent rumors is that IBM is going to drop the original PC for lack of
sales; in the end, it will totally redo its entire line of personal computers,
partly to slow clone makers ability to make copies. Whatever moves IBM makes
over the next months, it is certain that they are designed to be at the expense
of the Clone Makers.
