For the second quarter 2004, GTSI reported sales of $238.9 million, a 26% increase from $189.7 million during the same period a year ago. The company reported a loss of $1.6 million of net income versus $1.1 million of net income a year ago. In the second quarter of 2003, the company recorded a reversal of a $1.4 million ($0.8 million tax-effected) inventory impairment charge. For comparative purposes, adjusting for last year's second quarter reversal of the tax-effected impairment charge, net income would have been $0.3 million for the second quarter 2003. "We are very proud of the 32.3% increase in our bookings compared to Q2 last year and we are pleased to have surpassed $1 billion in sales for the most recent twelve months," said Dendy Young, Chairman and Chief Executive Officer of GTSI. "While our second quarter top-line growth was solid, we were disappointed with the results on the bottom line, and believe that there is considerable room for improvement. Management is keenly focused on margin. However, bookings are the clearest indicator of the health of our company, and the growth and strength of our backlog has positioned the company well for the coming quarter," added Mr. Young. As a company that generates most of its sales from the federal government, it is important to note that, due to the end-of-fiscal-year buying engaged in by the federal government around September 30th. GTSI generally achieves two-thirds of its sales during the second half of the year. Tom Mutryn, GTSI's Senior Vice President and Chief Financial Officer, commented, "GTSI's operating expenses increased in the quarter to $24.6 million versus $21.6 million in the same quarter a year ago. This increase is directly related to our aggressive efforts to comply with the Sarbanes-Oxley (SOX) 404 requirement, our new Enterprise Resource Planning (ERP) system development, our "I Rely on GTSI" marketing campaign and increased costs associated with new hires, all of which compressed net income. The company continues to enjoy a solid balance sheet with no long-term debt and $27.8 million in cash on hand at the end of the second quarter." GTSI's efforts to comply with SOX 404 will have a material negative effect on 2004 and 2005 results. Reported gross margin was $21.5 million in the second quarter 2004 versus $22.7 million a year ago. Without the inventory impairment reversal of a year ago, gross margin would have been $21.3 million in the second quarter of 2003. Sales for June 2004 were $93.0 million, representing a 9.6% increase of average daily sales from June 2003 of $81.0 million. Month-end total backlog for June was $155.0 million or a 46.0% increase versus $106.2 million for the month-end June 2003. Monthly bookings for June were $115.1 million or a 9.4% increase versus $100.4 million for the same period last year (see attached table). "We see a significant opportunity to invest in and grow GTSI. The fact that Government demand for information technology is at an all time high and that our industry is highly fragmented validates our decision to execute on a plan to significantly increase the sales of GTSI," said Mr. Young. "It took GTSI about six years to double revenue the last time, but we feel confident that we can achieve this level of growth during the next three to four years," said Mr. Young. "The combined Federal and State and local annual spending. on IT is well over $100 billion, and our market share for our addressable portion of this spending is in the low single digits. We believe that applying the right sales force directed at the right opportunities will allow us to grow top-line revenue," continued Mr. Young. "Equally important, we believe we can deliver increases in operating and net income margins through a series of initiatives which have been identified and are underway." Consistent with this longer-term plan, the company plans to increase its sales and support staff by about 10-15% by the end of 2004. The core strategy will be to strengthen relationships with federal government departments and agencies, expand relationships with systems integrators, and grow its presence with key state and local governments. GTSI will focus on margin expansion through better pricing, smarter purchasing, sales alignment to the customer, improving contract management, and a focus on higher value-add activities.

Red Hat has added new programs to Red Hat's already broad portfolio of partner programs. The Red Hat Partner Community is designed to encourage the combination of open source and traditional technologies into the fabric of enterprise computing to provide technology solutions that give customers more choice. The Red Hat Partner Community is bound together by a common commitment to industry standards and open source. This, combined with a rich online experience that starts with Red Hat Network, enables partners to collaborate to build the next generation of technology solutions for customers. Since 1993, Red Hat has been teaming with key developers of open source technologies to create the foundation that would enable Linux to be driven into the commercial environment. In 1999, Red Hat established the Red Hat Partner Program with computing leaders such as Dell, IBM, Intel Corporation, HP, and Oracle, which has been instrumental to the massive adoption of Linux in the enterprise. Now, more than 400 types of hardware and over 1000 enterprise applications are certified on Red Hat Enterprise Linux. The Red Hat Partner Community is a network of hundreds of technology companies, including hardware OEMs, software vendors, training organizations, distributors, developers and now, resellers, hosting providers and a broader range of technology solution vendors. Key partners, now including BEA, Fujitsu, Fujitsu-Siemens, Hitachi, NEC, NetApp, Rackspace , VERITAS and Wind River, and a host of other hardware, software and services companies, have aligned with Red Hat to create certified, industry standard solutions that work in concert with a flexible open source architecture. Industrias Penoles is the world's leading producer of refined silver and a customer who has had success with several members of the Red Hat Partner Community. "Through Red Hat's robust partner program our organization has had the choice of several certified options for building our ideal infrastructure based on open source," said Pedro Luis Sanchez Armas, IT Research Manager at Industrias Penoles, S.A. "Both HP and IBM provide our hardware, and we are running Sybase, a Red Hat Certified Application, in the datacenter. Open Trade, a Red Hat Business Partner in Mexico, supports additional Enteprise Linux pilot programs and migrations. For companies new to open source or looking to expand, Red Hat is a great guide in determining which solutions and providers will be the best fit with your organization."

Merisel announced that they have received notice that effective in 30 days, McAfee will be terminating their distribution agreement with the Company. The Company believes this event will have a substantial impact on the Company's revenues and operating performance, but the Company believes it can significantly reduce its operating expenses over time to reduce the long-term impact on the Company's operating performance. However, there are no assurances that the Company will be successful in doing so. For the year ended December 31, 2003 and the three months ended March 31, 2004, McAfee products accounted for approximately 94% and 84%, respectively, of the Company's net sales. Additionally, the Company is looking at various strategic alternatives for its software licensing business and will continue to seek acquisition opportunities that will enhance shareholder value. As of March 31, 2004, the Company had a net worth of $45.7 million, cash balances of approximately $49 million, and a net operating loss carry-forward in excess of $266 million

RedPrairie Corporation, a global leader in technology solutions that drive business process transformation announced the establishment of a Value-Added Reseller partnership with SAMSys Technologies, an international supplier of radio frequency identification (RFID) hardware solutions. Through the agreement, RedPrairie will offer SAMSys' line of RFID reader and antennae systems as part of RedPrairie's RFID middleware and end-to-end RFID solutions. SAMSys is the originator of the agile multi-frequency, multi-protocol and multi-regional UHF reader technology, which is becoming the standard for supply chain solutions. The SAMSys multi-protocol or "agile" capabilities offer greater flexibility in tag usage to meet customer-specific requirements. SAMSys' reader technologies will be integrated with RedPrairie's RFID middleware solutions to enable customers to achieve EPC compliance for Wal*Mart , the Department of Defense (DoD), Tesco, Metro and others. "SAMSys is committed to manufacturing the highest quality products, with exceptional after-sale service and support - two attributes we look for in our partners," said Gary Morgan, RFID Group Leader for RedPrairie. "SAMSys readers are found in some of the world's most sophisticated production and logistics environments. SAMSys' experience and technology will give us additional options in providing world-class supply chain technology solutions." "RedPrairie is known throughout the world for its advanced transportation, productivity, and distribution management solutions. SAMSys is pleased to add its products to the range of hardware solutions offered by RedPrairie," said James "Tres" Wiley, president and chief operating officer of SAMSys Technologies. "This agreement furthers our goal of being a preferred global technology supplier through alignments with top-tier VAR partners." RedPrairie offers its industry-tailored RFID and distribution solutions for companies in many markets including consumer goods, retail, food and beverage, high tech/electronics, third party logistics, industrial/wholesale, automotive and service parts, pharmaceuticals, and healthcare. In addition to its Wisconsin headquarters, the logistics solutions provider maintains sales and services offices in Raleigh NC and Eden Prairie MN; Stockenchurch and York, United Kingdom; Paris, France; Oosterhout, Netherlands, Brussels and Ninove, Belgium; and Shanghai, China.

Bell Microproducts has agreed to distribute Legacy Electronics full line of memory modules in North America, Latin America and Europe. This is the first time Legacy Electronics has chosen to work with another firm for product distribution. George Papajohn, Vice President of Industrial Products for Bell Microproducts, stated, "We are pleased to be engaging with Legacy Electronics. They offer high-performance Intel-compatible memory modules ideally suited for our server and desktop computing solutions. Legacy's products feature best-in-class DDR memory modules with superior thermal qualities that enable systems to run cooler. This agreement is a combination of Legacy's excellent technology and commitment to the channel, with our support of customers."

"We're very excited about the partnership with Bell Microproducts," stated Jason Engle, president/CEO of Legacy Electronics. "Through Bell Microproducts' distribution network we now have the capability to serve a much wider customer base in many parts of the world. Bell Microproducts is an industry-recognized specialist in enterprise storage, a very large focus market for Legacy's memory modules. Legacy's proprietary stacking alternative technology, Canopy(TM), is perfectly suited to high-end server and workstation platforms that require high-density memory solutions." Bell Microproducts' customers include: contract electronics manufacturing, systems integrators/builders, embedded computing, computing and storage components, medical imaging, website hosting, defense systems, Internet security appliances and telecommunications.

Phoenix Technologies announced Recover Pro Special Edition (SE) recovery and security software applications bundle for System Builders. The new Phoenix Technologies Recover Pro SE bundle is the only pre-operating system mode software bundle that offers system builders three after-market revenue-sharing opportunities and gives PC users protection and recovery from viruses and intrusions. The Phoenix Technologies Recover Pro SE bundle includes 30-day trial versions of Phoenix Technologies FirstWare Recover Pro SE and Network Associates McAfee(R) VirusScan(R) and Personal Firewall. PC users may purchase any of the products after the trials expire. Phoenix Technologies Recover Pro SE, McAfee VirusScan and Personal Firewall products are available to PC users for $19.95, $39.95 and $39.95 respectively. "We're offering system builders the opportunity to build after-market revenue," said Michael D. Goldgof, Senior Vice President and General Manager of Corporate Marketing and Products Division for Phoenix Technologies. "Innovative system builders have been forced to micromanage costs while the market was not growing significantly. Now the market for unbranded PCs is growing again, and system builders will need to differentiate on value. Phoenix delivers a worry-free way to do that." Built-in Factory Image Restoration with Ability to Upgrade to Full Incremental Back up The Phoenix Technologies Recover Pro SE solution is installed by system builders during the manufacturing process. Phoenix Technologies Recover Pro SE provides full software restoration - including the operating system, applications, user settings and all data files, all without a recovery CD. The bundle includes Phoenix Technologies cME Console, a customizable dashboard for application launch and management; and Phoenix Technologies cME Vault, a protected virtual CD bunker on the hard disc drive that contains the McAfee software products. The initial backup and restore setting is the factory image, which includes the operating system software and applications installed at manufacture by the system builder. When users choose to upgrade to Phoenix Technologies Recover Pro SE, they add the capability to perform regular, automated backups to incremental restore points. Restore points can be set monthly, weekly, daily or hourly. "PC recovery and virus protection are extremely important requirements for PC users today, and the Phoenix Technologies-Network Associates combination of recovery and security applications delivers technology that adds substantial value to innovative system builders and VARs," added Michael D. Goldgof. "The Recover Pro SE bundle helps leading System Builder Innovators and VARs generate incremental revenue while they provide this much needed service and recovery capabilities to their customers. Innovative System Builders Embrace New Built-in PC Recovery Solution Shuttle Computer Group, Inc. of City of Industry, Calif., is shipping over 4,000 of the company's advanced XPC systems with Phoenix Technologies Recover Pro SE built in. "We have recognized immediate value and sell-through of the Phoenix Technologies Recover Pro SE products to Best Buy. This is indicative of the retail and end user demand for seamless, easy-to-use, incremental backup and restore applications that we are seeing in the market today," said Michael Wu, President of Shuttle Computer Group, Inc. "Phoenix Technologies Recover Pro SE allows us to manage and support multiple SKUs without requiring inventory for recovery CDs, or having to worry about revision changes for recovery CDs. This lets us focus on our customers and increasing the value of our services." ElitePC, Tempe, AZ, a premier system builder, will begin shipping Recover Pro SE on all desktops and notebooks this month. "Phoenix is the only company to be able to provide us with a solution that can be downloaded and immediately used to deliver incremental backup and system and file restoration. This is a great way for us to get built-in recovery into our corporate, government, and education accounts and via our Web direct sales to end users," said Steve Jarvis, President, Elite PC. "The fact that we can offer Phoenix Technologies Recover Pro SE products, bundled with McAfee products free for 30 days, gives our customers a worry and risk-free way to evaluate the products and see how easy they are to use and how well they work to backup, recover and protect remote and LAN-connected enterprise PCs."

Averatec, Inc., an emerging leader in innovative mobile computing products, today announced the launch of its C3500 Series of mobile notebook PCs, which premiers a creative and exciting design merging a mobile notebook computer and a tablet PC into a single ultra-portable form factor. As a notebook, this compact unit offers all of the features and functionality that mobile users expect, while also incorporating advanced handwriting and speech recognition technologies for comprehensive functioning as a tablet PC. The affordably priced C3500 offers a built-in DVD+CD-RW combination drive and wireless networking capabilities. The notebooks are equipped with a low-power Mobile AMD Athlon XP-M 2200+ processor with PowerNow!(TM) technology, as well as 512MB DDR333 memory and a 60 GB hard drive. The notebook's intuitive design makes switching from notebook to tablet mode quick and easy with a simple rotation of the screen. The C3500 offers a 12.1-inch, high-contrast TFT display, which provides resolutions of up to 1024x768. The C3500 Series compact design is 11.6" by 9.8" by 1.57" package that weighs in at just 4.5 pounds with a standard battery. The unit also includes four high-speed USB 2.0 ports and one Type II PC Card/CardBus slot, for quick and easy addition of additional capabilities. Pricing starts at just $1299.99 after $50 mail-in-rebate. "With the C3500 Series, Averatec has extended its tradition of innovative mobile computing in a way that offers users two compelling mobile products, in a single compact package," said Saeed Shahbazi, President of Averatec. "This product is an industry first, with AMD's processor technology and the added functionality offered by a built-in optical DVD/CD-RW combination drive. Unmatched engineering has created a notebook that is stylish, affordable and eminently usable." The C3500 series features a built-in 54-Mbit 802.11g wireless technology, and integrated 10/100 Mbit network LAN and a 56k data/fax modem. The built-in DVD/CD-RW combo optical drive allows users to burn media and data files, watch DVD movies, and listen to music while they work. Four high-speed active USB 2.0 ports provide connectivity options for a complete range of peripherals including digital cameras, printers, scanners, fax machines, and other peripherals. A Smart Li-Ion battery offers users up to four hours of work time between charges. The C3500 Series notebooks come standard with Microsoft(R) Windows(R) XP Tablet PC Edition, Microsoft(R) OneNote 2003, PowerDVD, Computer Associates EZ Trust Anti-Virus and Roxio(TM) Easy CD Creator 6.0. Microphone input and audio output jacks are coupled with a full-size standard keyboard with a large touchpad to give users an optimal user experience. The C3500 series is backed by a 1-year limited warranty (and 6 months for the battery). Technical support is accessible 24- hours a day, 7-days a week through a toll free number. The convertible notebook is available through major electronic retailers, resellers and distributors.

DisplaySearch, the worldwide leader in flat panel display (FPD) market research and consulting, indicated in their latest "Monthly Large-Area LCD Pricing Report" that blended large-area (10" and greater) TFT LCD prices dropped for the first time in 18 months, ending a remarkable streak of price increases at individual sizes and gains in share at larger sizes leading to record profits for TFT LCD producers. Blended large-area prices fell 3% from $295 to $285 in July and are expected to fall another 3% in August to $275, and then decline at 2% per month through the end of the year as demand responds. This reversal in pricing is a result of weakness in the LCD monitor market that is fueling larger than anticipated price reductions in notebook PCs and LCD TVs as panel suppliers look to stimulate demand. The market shifted at the beginning of June when leading LCD monitor brands suddenly reduced panel orders, claiming reduced LCD monitor demand, rising inventory levels and excessively high panel prices. The weakness in demand is a result of seasonal declines, rising street prices in a price sensitive market and the emergence of the $499 bundled 17" CRT/desktop PC which is growing in popularity. With LCD monitor inventories at high levels, brands are delaying future panel orders as long as possible to get the best pricing. With panel suppliers not expecting this situation, panel inventories have also risen, increasing pricing pressure. Panel suppliers are reacting by reducing utilization and pricing at levels desired to reach target street price points expected to re-invigorate the market. However, brands are not expected to immediately pass along these price reductions in order to correct their margins, develop sales campaigns and fill the pipeline at new cost levels. As a result, monitor panel volumes will not quickly rebound and a sequential decline is likely in Q3'04, causing the large-area TFT LCD surplus to rise to double-digit levels in Q3'04. If component constraints are considered, the surplus is expected to be 6%. Demand should eventually recover for the back to school and holiday season, supported by lower prices. In addition, with many CRT producers are already at full capacity and not expecting to boost capacity further, desktop monitor suppliers will look to LCD manufacturers to meet their full year volume targets. Notebook PC and LCD TV volumes are also expected to benefit from lower prices, resulting in slower price reductions from September to December. 15" monitor panels fell the fastest of any LCD monitor panel in July, down 7% to $215, and are expected to fall another 7% in August to $200 and reach $180 by the end of the year, enabling $299 street prices at double-digit margins for LCD monitor brands. 15" XGA monitor and notebook panel prices are now priced the same, with 15" monitor panel prices expected to be priced $11 below 15" notebook panels in December. 17" monitor panels fell 6% in July, and are expected to fall another 6% in August to $260. 17" SXGA prices are expected to continue falling, reaching $230 by the end of the year and enabling $349 street prices at double-digit margins. While the near-term looks negative for LCD makers, with panel prices now falling faster than expected, the volume outlook for 2005 will be higher than previously forecasted, narrowing healthy surpluses and presenting a potentially more stable pricing environment as demand accelerates. DisplaySearch's 50+ slide "Monthly Large-Area LCD Pricing Report" is priced from $3995 - $4995 for an annual subscription and covers a wide range of notebook PC, LCD monitor and LCD TV panels. For more information, please contact Jerry Benson at jerry@displaysearch.com or 512-459-3126, ext. 108. DisplaySearch will also discuss its FPD market outlook at its upcoming half-day FPD Market Briefing and three-day HDTV Forum 2004. For more information on this important event, please visit www.displaysearch.com/hdtvforum or contact Kendra Smith at 512-459-3126, ext. 107, or by email at kendra@displaysearch.com.

Black Box Corporation (Nasdaq:BBOX) today reported for the first quarter ended July 3, 2004 diluted earnings per share of 54 cents compared to 60 cents last year. Net income for the first quarter was $10.0 million or 8.0% of revenues, compared to $11.5 million or 9.0% of revenues last year. On a sequential comparison basis, fourth quarter diluted earnings per share were 61 cents with corresponding net income of $11.5 million or 8.9% of revenues. Total revenues for the first quarter were $124.4 million, down 3% from $128.3 million last year. On a sequential comparison basis, fourth quarter revenues were $129.7 million. First quarter cash provided by operating activities was $9 million or 92% of net income, compared to $14 million or 123% of net income last year. On a sequential comparison basis, fourth quarter cash provided by operating activities was $27 million. Black Box utilized $1 million of the cash from operations for the quarter to make a dividend payment and utilized the remaining $8 million, together with $17 million from other sources of cash, to repurchase $25 million of its Common Stock. The Company's 6-month order backlog was $53 million at July 3, 2004 compared to $56 million at the end of March 2004. Commenting on the first quarter results, Fred C. Young, Chief Executive Officer, said, "Revenues of $124 million were down sequentially due primarily to one specific large client delaying for 90 days certain previously scheduled IT projects of approximately $3 million and a negative impact of currency translation of approximately $1 million. Gross profit percentage of 41.7% remained strong and consistent with previous quarters. Although operating expense dollars were down sequentially, the corresponding operating expense percentage of 28.9% was up due to the lower revenues and additional professional services incurred relating to year-end auditing activities. Operating cash flow of $9 million was consistent with net income of $10 million." Mr. Young continued, "Relative to our second quarter, we currently expect revenues to be within a range of $127 to $129 million based on typical US government spending cycles and the return to a historical spend level with the previously-mentioned large client. Gross profit is expected to be in the 41% to 42% range. Total operating expenses are expected to be in the 27.5% to 28% range. "Operating cash flow should remain strong and increase to $12 to $15 million based on earnings and incremental working capital improvements. We will continue our stock repurchase program subject to continued business stability and at levels consistent with operating cash flow generation. "In summary, although we had to deal with a few short-term impacts in our first quarter, the fundamental business model remains strong. And this includes our main focus centered around profitable 'green growth' for Black Box's world-class technical support services."

Monster Cable Products, Inc., the world's leading manufacturer of high-performance audio/video accessories and power products, has partnered with the Consumer Electronics Association to help Mobile industry installers and store personnel boost their knowledge and career by subsidizing Mobile Electronics Certified Professional study materials and certification. The certification helps educate mobile professionals how to present better solutions to their customers by introducing car audio as a complete system - speakers, subwoofers, interconnects, amplifiers - as opposed to "stand-alone" audio components. The study material covers the latest information about on-board navigation and multimedia systems, as well as audio, security, troubleshooting, power, shop safety, mobile computing and installation techniques. Qualifying program participants will receive $100 worth of Monster Performance Car products. This subsidy is available exclusively to Monster retailers' store and installation staff who become MECP-Certified between August 1 and December 31, 2004. The $100 voucher, redeemable for Monster Performance Car product, is designed to help cover participants' cost of the MECP testing itself, which can range anywhere from approximately $60 to $114, including study materials. Monster Performance Car is Monster's latest in a growing line of car power delivery solutions, connectors, interconnects, speaker cables and iPod accessories, all designed to deliver the highest-quality aftermarket performance car and mobile entertainment experiences. "When a customer wants to upgrade their car audio, security, navigation or wireless systems, they look to the installers or store personnel for the knowledge, expertise and professionalism required to help guide their purchase decisions," said Gary Shapiro, President of the Consumer Electronics Association. "MECP Certification is designed to give retail personnel that knowledge, and we're proud to partner with Monster to bring it to the industry as a whole." "The mobile industry has given Monster a lot, and we're excited to have this opportunity to give back," said Peter Radsliff, Monster's Director of Product Development and Marketing. "Partnering with CEA to offer MECP Certification is a natural extension of the training programs Monster already provides to its dealers."

Creative Labs introduced the Zen Touch, a 1.8-inch hard drive-based portable audio player that holds twice the music and provides up to three times the battery life as a 20GB Apple iPod. With the innovative patent pending "Touch Pad" control, the Creative Zen Touch enables a user to simply move a thumb up and down in a natural motion on the Touch Pad to navigate quickly and easily to specific albums, artists, genres, tracks, or playlists. With a very light touch of the thumb on the Touch Pad or by pressing the "OK" button on the face of the player, users can easily access musical selections. The face of the player also features a dedicated "Random" button for spontaneous music playback of any combination of songs. "The Zen Touch is so simple and fun to use because the Touch Pad makes it easy to find your favorite songs, or you can just hit the random button for a mix of music to match any mood," said Lisa O'Malley, senior brand manager for portable audio at Creative. "Plus you can take the Zen Touch on long trips and leave the power cable at home without worrying about the rechargeable battery running out." Equally as cool-looking as it is feature-rich, the metallic graphite and white gloss-colored Zen Touch displays track and menu information on its large, brilliant blue backlit LCD screen. In addition to its groundbreaking battery life and super-intuitive user interface, the Zen Touch provides industry-leading audio quality and broad compatibility with download services supporting WMA and MP3 music for enjoyment of up to 10,000 songs. Crystal-clear high fidelity playback at 98dB SNR can be customized with a four-band graphic equalizer with eight equalization presets. USB 2.0 connectivity enables super-fast music transfer from a PC as quickly as a song per second. Exclusively previewed by Microsoft at the 2004 WinHEC event, the Zen Touch was showcased as the first player to support upgrade to the next generation of Windows Media Digital Rights Management (DRM) technology, a platform for providing exciting new subscription models for content download. "With its exciting new device, the Zen Touch, Creative sets a new bar for battery life and provides music fans a broad choice of music services accessed within Windows Media Player," said Jonathan Usher, director of the Windows Digital Media Division at Microsoft Corp. "The Zen Touch is the first in a new line of products from Creative that will support our next generation Windows Media DRM, enabling new playback scenarios for subscription-based or on-demand digital music." The new Creative Zen Touch 20GB, available today for preorder online at Amazon.com and www.creative.com for $269.99, is slated for shipment this month. The ultra-portable audio player comes with a black protective case, neodymium headphones, a USB 2.0 cable, and a universal power adapter. The player also includes Creative MediaSource™, an easy-to-use application for ripping CDs, organizing entire digital music collections, and easily transferring MP3 and WMA files.

Pronto Networks announced its PartnerPower Program with eight new distribution partners worldwide. The distributors will resell Pronto's back-office public Wi-Fi products to the communications and hospitality markets in Western and Eastern Europe, Latin America, the Middle East, South Asia and North America. The resellers will offer Pronto Networks' suite of public Wi-Fi solutions, including Pronto's turnkey hotspot network appliance and carrier-grade Wi-Fi OSS software. The hotspot network appliance is an easy-to-deploy, bundled hardware and software solution that allows service providers and system integrators to quickly and cost-effectively enter the Wi-Fi market and offer subscriber services. The OSS back-office management software provides a flexible platform for launching Wi-Fi as well as other value-added services and easily integrates into existing systems.

"Demand for large scale, public Wi-Fi networks is growing around the globe and the timing couldn't be better for the launch of our PartnerPower Program," said Eric Dentler, Director of Business Development at Pronto Networks. "Working with our new reseller partners, Pronto Networks is enabling customers in both developing countries and tourist hot beds to implement the best platform for delivering wireless services today and prepare for the next generation of services tomorrow." New distribution partners include Al-Jammaz Telecom in Saudi Arabia, BIC Communications, Inc. in the United States, DDS in Germany, ellipse in the United Kingdom, i-movil in Mexico, Telegroup d.o.o. Beograd in Serbia and Montenegro, and Convergent Communications and Tata Infotech Ltd in India. This builds upon a distribution agreement Pronto recently announced with Graybar, a leader in the distribution of electrical and telecommunications products, and with Sun Microsystems. As of today, Graybar's Florida-based distributor Terranovus has delivered the first Wi-Fi hotspot network appliance into the hospitality industry.

"We are delighted to be partnering with Pronto Networks to offer the leading OSS products for Wi-Fi deployments to our customers," said Mr. Asim Al-Jammaz, Vice President of Al-Jammaz Telecom. "Pronto's products are a great addition to our existing broadband portfolio. Given the considerable demand for Wi-Fi services in Saudi Arabia, especially within the hospitality sector, we're rather optimistic about the potential sales of these products."

Mr. Bernd Kahnes, president and CEO of DDS, stated, "DDS is committed to working with the leading WLAN technologies to deploy the best products and services for our customers' hot spot and hot zone deployments. We are pleased to be offering the Pronto product suite that enables the subscriber management, network management, billing and roaming features required for next generation Wi-Fi services."

ChannelWave and ATI Technologies announced that ATI has launched full-service commerce sites in the United States and Canada, powered by ChannelWave. The new online stores offer direct, secure access to ATI's award-winning, innovative 3D graphics and digital media products for every level of computer pro, gamer and enthusiast, as well as accessories, specials and ATI-branded posters, mouse pads, baseball caps and T-shirts. The sites can be accessed via ATI's corporate Web site or directly at shop.ati.com in the U.S. and shopati.ca in Canada. The ATI sites create a positive customer experience by creating an online retail site that links to the corporate Web site and provides easy-to-find information on product features, specifications, availability, warranty, best sellers, recommended accessories and special promotions like free shipping. Using ChannelWave, ATI is also able to automate trade-up programs for customers and offer an employee purchase program for ATI and retail partner employees in the U.S. and Canada. Upcoming features will include reviews and accessories tabs, special offers, gift certificates, loyalty programs and affiliate marketing. ChannelWave's managed services model provides a complete commerce solution for ATI, from designing and hosting the online store, to merchandising, marketing campaigns, transaction management, fraud screening, multi-sourced fulfillment based on cost and availability, customer service call center, telesales and returns. "As the needs of our online store grew, we recognized that outsourcing was the best way to manage our sales growth, avoid operational headaches and improve efficiencies across our e-commerce initiatives," said Bal Sahjpaul, Director, Marketing Services, ATI Technologies. "We selected ChannelWave over competitors because of its customized approach to meeting our business requirements and the unique needs of our customers. We are already light years ahead of where we were. The new sites are well designed, feature expert merchandising and customer service, and make it easy to process and fulfill orders."

RESEARCH

Gartner Says Worldwide PC Shipments Grew More Than 13 Percent in Second Quarter of 2004
By Gartner Staff

Replacement PC purchases remained the key engine of growth for the industry, as worldwide PC shipments totaled 43 million units in the second quarter of 2004, a 13.3 percent increase over the same period last year, according to preliminary results by Gartner, Inc.

"The PC market performed in line with expectations during the second quarter of 2004, exhibiting typical seasonal user demand patterns," said Charles Smulders, vice president of Gartner Computing Platforms Worldwide group. "The professional market is crucial to the second quarter's overall results. While early software and storage segment results have shown some weakness relative to industry expectations, the professional PC market was on track."

On a vendor basis, Dell retained its No. 1 position in both the worldwide and U.S. PC markets in the second quarter of 2004 (see Tables 1 and 2). Dell experienced double-digit growth across all regions. Due to the typical second-quarter performance, Dell's corporate and public sector business grew relatively faster than the home market. Hewlett-Packard's worldwide year-on-year growth was slightly above industry average, as it showed the strongest growth in Asia/Pacific, including Japan. An internal re-organization at HP during the quarter is likely to have had some impact on the company's performance. In the United States, PC shipments totaled 14 million units in the second quarter of 2004, an 11.4 percent increase from the second quarter of 2003. "The Gartner IT Watch (a monthly survey among IT decision managers in U.S. businesses) shows that U.S. corporate sentiment towards PC hardware spending remained positive during the quarter, with companies spending to budget," Mr. Smulders said.

PC Graphic Device Market Review
By Jon Peddie Research

Jon Peddie Research, a leading research and consulting firm for graphics and multimedia, said that approximately 54.3 million PC graphics devices shipped from eight suppliers in Q2'04, a 5.2% decline from the previous quarter and a 12.8% increase over the same period the previous year. The desktop graphics segment saw a 6.6% decline in quarterly shipments but achieved 10.6% growth year-over-year. Within the desktop segment, discrete controller shipments declined 19.2% sequentially while integrated graphics shipments increased 5.5% on a quarterly basis. Growth in the desktop IGC market was led by Intel and VIA Technologies. Approximately 10.5 million mobile graphics processors shipped from six suppliers in Q2'04, up one percent from the previous quarter and up 23.1% year-over-year. Shipments of integrated graphics chipsets for notebooks slightly outpaced those of discrete (stand-alone) mobile graphics processors during the period, but discrete controllers displayed sequential growth of 2.7% while IGC shipments remained essentially flat as compared to Q1'04. Intel was the only supplier to see its shipments of IGCs for notebooks increase on either a sequential or annual basis in Q2'04. "Quarterly shipment declines in the second quarter are to be expected in the graphics industry; however, year-over-year growth in Q2'04 was fairly robust in all segments except for the discrete desktop market, where shipments increased just 2.7%," said Lisa Epstein, a senior analyst at Jon Peddie Research. "The small window that opened in Q1'04 for discrete desktop graphics swiftly closed in Q2'04 as Intel started shipping its new Grantsdale ICG. When Intel ships a new IGC, ATI and NVIDIA immediately lose ground," Epstein concluded. Intel saw a 7.9% quarterly increase in graphics shipments in Q2'04, was the largest supplier of PC graphics devices worldwide, and claimed an increased share of the total graphics market. NVIDIA was the second largest supplier in Q2'04 but with reduced shipments and share of the total graphics market. ATI was the third largest supplier in Q2'04, also with reduced shipments and share. The following table lists the ranking and relative market share, based on unit shipments in Q1'04 and Q2'04, of the eight major graphics suppliers to the PC industry. For information about purchasing Market Watch, please call (415) 435-9368 or visit the Jon Peddie Research Web site at www.jonpeddie.com.

		Q1'04	Q2'04
Rank	Graphics Supplier	Market Share	Market Share
1	Intel	33.0%	37.7%
2	NVIDIA	27.2%	23.2%
3	ATI Technologies	24.0%	23.2%
4	VIA Technologies	7.8%	8.9%
5	Silicon Integrated Systems (SiS)	6.9%	6.2%
6	Matrox Graphics	0.52%	0.46%
7	XGI	0.44%	0.26%
8	3Dlabs (Creative Technology)	0.04%	0.04%

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The Rebirth of the Tablet PC By: Sam Bhavnani and Nicki D'Onofrio Mobile Computing Analyst, PC Data Analyst

I'm tired of handwriting notes in meetings only to have to go back to my PC and retype those same remarks. I don't need a note-taking "trial run"; I want an efficient way to take and store notes electronically once. Some co-workers take their notebook computers into meetings, but I'm uncomfortable typing away on my computer while everyone else in the room assumes I'm surfing through ESPN.com or catching up on e-mail. And I want a notebook computer that works more like a paper tablet, unobtrusive and easy-to-use. Ideally, what I am really looking for is a convertible tablet PC, but I cannot justify note taking/filing at a $2,399 price point when my plain old paper notebook costs $2.39.

Convertible Tablet Market

The convertible tablet, which first entered the market in late 2002, is a traditional notebook computer packaged with tablet functionality. The display can be rotated and lowered so the screen is laying flat on top of the computer. These notebooks carry Microsoft's Tablet PC operating system with handwriting recognition capability which makes it possible for users to input information with a stylus similar to the writing instruments which come with handheld devices and the tablet handwriting recognition software offers much better results than what we see in handhelds today.

A convertible tablet is obviously useful but sales figures are so far unimpressive, accounting for less than 1% of the U.S. retail notebook market. The adoption rate of these portable computers is slow for two primary reasons - minimal channel presence and high price tags.

Only a limited number of manufacturers currently offer convertible tablet models and the majority of these systems sell through the direct and e-commerce channels. The tablet market's major players are Toshiba, Acer, HP (Compaq), Gateway, Fujitsu, and ViewSonic. In retail, Toshiba's M205-S810 model is the only convertible tablet PC consistently available.

Because most tablet manufacturers target the corporate market, it is not surprising there are a limited number of models offered through the retail channel. However, to ensure mass adoption of this technology, manufacturers need to make a stronger play in the retail channel, which caters to many small and medium business customers as well as home users.

A price point over $2,000 is the convertible tablet's real Achilles heel. Many of the convertible models offer standard processor, memory, and hard drive features at price points significantly higher than those of traditional notebook computers. As a result, tablet functionality today is a nice-to-have, but not a need-to-have.

The majority of the notebooks available for the retail market are desktop replacement systems with displays over 15 inches. But even with a smaller form factor, the current crop of convertible tablets have a tough time defending their price points. For example, the Toshiba M205-S810 convertible tablet lacks a system configuration that justifies the premium price it carries over its retail competition, which ranges from a few hundred dollars to well over one thousand dollars. Even the ultra-portable Sony S150, which has an integrated optical drive, higher performance processor, and a premium brand name, promises a price savings of $400 compared to the Toshiba convertible.

A comparison of existing retail Tablet PC offerings to traditional retail systems:

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Enterprises are Still Using Their Most Valuable Assets People, Unwisely and Inefficiently
By SingleStep and Sage Research

Imagine being able automate the mundane repetitive tasks during your typical day so you can focus on the more interesting and innovative part of your job. Surprisingly, our recently completed research showed that IT departments are still doing a startling amount of manual operations. Today's IT departments are still tasked with manually gathering data for analysis, fixing email servers, and rebooting machines. These simple manual tasks could be solved by doing some conceptually simple automation, which can gather, describe, and resolve system's disparate data. However, in order to achieve an autonomic solution to their manual labor, IT departments first need a toolset that enables the integration of their disparate data. Presently there is so much information and infinite possibilities of problems that IT departments don't know where to start and what to integrate. Because of this, IT naturally withdraws themselves from their sights on autonomic computing and relies on their old-fashion ways of gathering data and trouble-shooting problems.

With a new push towards automation and adaptive solutions, we quickly begin to realize, for the majority of companies, these solutions are not yet possible. Currently, most IT departments reside between having a basic and managed network, and while this may be, a hectic yet easy pattern to stay in, at some level, all companies would like to move to the next level of autonomic computing. In spite of this, the move to a predictive or an adaptive network requires a tremendous amount of work and a giant leap forward over the gap of integrating disparate systems and analyzing detail.

CIO's don't crave more information. In fact, they have too much information. Data is abundant; however, having easier and better access to this information is imperative for improving decision-making. Currently, most organizations have data spread over disparate systems throughout their network. The challenge that most IT departments are facing is consolidation, organization, and integration of this disparate departmental data, let alone analysis and automation. According to our research, CIO's top priority is integration of existing investments. Consequently, the most essential piece, consolidation, happens to be the most difficult roadblock for creating an autonomic solution. Once past this initial hurdle, suddenly, the ability to gather and interpret more analysis can be an important factor for influencing company's network management and IT process organization.

The concept of autonomic computing sounds intriguing, but right now most companies don't need an autonomic solution that will do everything. Our research shows, that most companies aren't ready for this type of fully automated solution right now. The average network is viewed as being between a basic and managed network, and in order for a company to make the first step towards an autonomic solution, they will need to get past the hurdle of data integration. An autonomic accelerated solution can solve this problem for companies by helping organize and integrate their data into a centralized repository for control and analysis. This process of moving from a basic managed network structure to an adaptive network structure is fundamentally challenging due to a large gap between a basic and managed framework. To bridge this gap, integration is needed between the disparate systems. This base provides a consolidated, tightly woven, platform that an IT team can successfully manage. Accessible autonomic computing enables companies to take the first step into truly scaling to an autonomic network.

CIO's want to start automating, but only simple actions.

To fully automate means to give up control, and giving up control is something that CIO's are not ready to do. CIO's want to know where information is going, what's happening to their network, and whose responsible if something breaks. However, giving up control and gaining automation isn't necessarily the same thing. Our recent research has shown that most CIO's are ready for automation in some degree. CIO's need the knowledge and detailed analysis of their network which is hard to get, and even more so, if automation is involved.

Automation, a key step to a truly autonomic computing solution, does quite the opposite of creating a blanket over the network. Automation eliminates the simple networking tasks such as pulling data, responding to trivial network issues, and even filtering out erroneous networking messages; tasks that requires little human intervention, and as a result, frees IT time to focus on more of the health and infrastructure of the network itself.

Taking small strides to automate the network ensures building a correct and accurate self-healing network. This will build a solution that is responsive and extensible without giving up network intelligence and insight. Automation, coupled with analysis and integration, enable a cautious and safe passage to autonomic computing.

Singlestep Technologies™ provides solutions that help IT professionals automate the process of running and managing the data center. Our first application, Singlestep Unity™ is built with our patented technology, and designed to control the flow of information from existing network management systems to any IT stakeholder. Operations staff use Unity to bring together information from multiple existing network or security management systems and to automate the response to identified problems. CIO's and others use Unity to produce a business impact view of network performance, so they can better align IT expenses to deliver business benefit. At all levels our products help integrate existing information, provide analysis and automate response. Going forward, we intend to duplicate our success in network management across all the stores of information in the data center that are event driven, multi-vendor, and managed today through manual processes. We have started this by partnering with the largest companies that deliver service and best practices to IT consumers (IBM, HP, etc.).

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COMMUNITY

Whether it is for the home or office, that's a lot of storage!
By G. A. "Andy" Marken, President, Marken Communications

Optical storage is one of the finest storage solutions ever developed for a limitless range of applications. We thought we had better say that at the outset because you might get the feeling we are out to trash the technology in a few minutes.

Hard drives have a basic set of specifications and firms like Hitachi, Western Digital, Seagate and others simply focus on producing the spinning jewels. They knock out tiny ones, ultra fast units, huge capacity drives. They are put into copiers, cars, PCs, music pods, trains, planes, submarines and business SAN/NAS storage systems.

Super creative people keep figuring out how to pack more date in a smaller space, make them more rugged, advancing their read/write speed and making them cheaper and cheaper.

To the consumer - business or home - a hard drive…is a hard drive…is a hard drive.

Not so with optical !!

We had MO, we have CD, we have DVD (+/-R, RW, RAM, DL). Now we have next generation technologies jockeying for the winner's circle.

We start with a singular writing/reading device - blue laser. But immediately we have two paths - consumer applications and business applications. These paths divide into two additional paths - Blu-Ray and HD DVD or AOD (advanced optical disc) and UDO (ultra density optical) and Professional Disc for Data respectively.

But at the end of the day they are all big data bit buckets designed to store mega-, giga-, tera-, peta- and beyond bytes of data.

30,000 ft View All of these storage devices - hard drives and optical drives - are being designed, manufactured and offered to store information for government, manufacturing, healthcare, financial management, law enforcement and small-medium sized business applications as well as personal/home entertainment.

The total computerized market is in excess of one trillion dollars (Chart A) and after what can only be nicely referred to as a couple of "rough" years could increase by slightly more than 4% this year according to Framingham, MA based IDC (Chart B) and 6% next year.

According to some industry analysts 40% of the IT spending is in storage. The sales potential could be even greater as companies large and small understand that their strategic advantage sits in a storage device - somewhere in the organization. This awakening is forcing CIOs to develop strategies to return to a more centralized approach to their storage applications (Chart C).

The shift in management's and IT's focus will undoubtedly put organizations like HP and IBM that provide both consulting, design and implementation services as well as product at odds with many of their integrators. However, this territorial disagreement has been going on since the first IBM 360 was installed more than 40 years ago. The turf arguments will continue as direct and indirect solutions integration organizations constantly realign expertise and product/service offerings to meet customers' ever-changing priorities and requirements.

Storage solutions - HD or optical based - don't exist in a horizontal or vertical scaleable plane. As IDC so succinctly illustrated the business users' priorities and requirements (chart D), they exist in three-dimensions. Understanding the market, application and relative importance of each of the requirements will undoubtedly be more important than the specific storage technology.

As the mountains of data seem to increase exponentially on a quarterly basis, business and IT management focus on making the information useable so they can make effective decisions in real-time.

Optical Belongs in Picture
Over the years optical technology has proven its value as a random-access writable technology.

Due in some small part to the fact that almost every PC shipped today has a CD-RW burner installed; 700MB CD-R media sales have remained strong even as DVD+/-R has gained interest. Last year 7,150 million discs were sold according to Magnetic Media Information Services (MMIS) compared to only 375 million DVDR discs. While DVDR shipments will more than double this year, CD-R sales will only increase about 10%.

The technology will remain relevant through 2010 because:

• it is ubiquitous
• as with HD technology integrators, OEMs and business/home users must only think about one technology
• storage is reliable and can be played virtually everywhere
• media costs almost nothing
• the ability to store 60,000 documents, 2500 images, 80 minutes of audio and about 20 minutes of quality video is sufficient for day-to-day applications

Despite its stumbling start and two factions, DVDR is making rapid progress. Burner and player manufacturers simply chose to provide both +/-R write/read capabilities so they could focus on selling product rather than participate in turf wars. By the end of the year very inexpensive internal burners will be able to write 4.7GB discs at 16x. At the same time economic burners will be available that can write 8.5GB double layer discs.

Both media will be playable in the vast majority of drives, players and libraries. The 4.7GB disc stores as many as:

• 5,200 full-colored digital pictures (640x480, 24 bit/pixel)
• 230 minutes of MPEG2 compressed DSS satellite quality video (at 3Mbps)
• 150 minutes of MPEG2 compressed theatrical quality video
• more than eight hours of CD quality audio (44.1kHz, 16bit)
• eight 4-drawer filing cabinets of documents.

Whether it is for home or the office, that is a lot of storage!

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Breakaway: The Event for Channel Education and Intervention
By ChannelMedia Staff

CompTIA Breakaway 2004, the annual CompTIA Member Conference met its goal of helping its membership "Create a Measurable Difference" by bringing together executive-level representatives from computer industry manufacturers, distributors, value-added resellers, systems integrators, independent software vendors, service providers and consultants.

During the first week of August over 700 attendees gathered at the Walt Disney World Dolphin Resort for Breakaway. Breakaway differentiates itself from other channel and vendor events by the depth and breadth of its educational sessions and informational sessions. Sessions featuring top industry and government speakers drove attendees to ask these experts "What are my business opportunities and how do I remain profitable?" Amit Yoran, Director Cyber Security for the Department of Homeland Security spoke to the attendees about threats to Cyber Security and business opportunities to address these threats.

To answer some of the channel questions on profitability Bob DeMarzo, Editorial Director and Vice President, CMP, led an Executive Industry Panel that focused on Affecting Reseller Profitability. This prestigious panel included Margo Day, Vice President, US Partner Group, Microsoft, Gary Gillam, Vice President North America Channel Operation, Xerox Corporation, John E. Paget, President of North America and Chief Operating Officer, Synnex Corporation, Jon Reardon, Senior Vice President Marketing & Product Division, Konica Minolta Business Solutions, USA, Susan Reynolds, Vice President, Partner Development and Programs, Americas, Hewlett-Packard and Eric Williams, Executive Vice President of SupportNet, a Division of Arrow NACP. Through the use of audience response technology these session speakers gauged the climate of the audience and focused their comments accordingly. During the 25 concurrent Breakaway sessions speakers continued to focus on how the attendees could improve their business practices and attract new customers.

The Solutions Pavilion provided attendees and sponsors the opportunity to network and build business relationships. Over 50 sponsors filled the hall and met with the attendees. Overall the sponsors felt the quality and quantity of attendees exceeded their expectations.

Breakaway sessions closed with a presentation by The Disney Institute, Organizational Creativity, Disney Style. This highly energetic session focused on how business could take proven Disney practices and apply them to their organizations to stimulate creativity.

To learn more about Breakaway go to: http://www.comptia.org

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Top-Selling Software Week of July 25 – July 31, 2004
All Categories
1	Norton Antivirus 2004	Symantec	$42
2	Norton Internet Security 2004	Symantec	$65
3	MS Office 2003 Student/Teacher Ed	Microsoft	$133
4	MS Windows XP Home Ed Upgr	Microsoft	$95
5	Spy Sweeper	Webroot	$29
6	Spy Sweeper JC	Webroot	$12
7	Norton System Works 2004	Symantec	$68
8	VirusScan 8.0	Network Associates	$49
9	MS Windows XP Pro Upgr	Microsoft	$186
10	MS Streets & Trips 2004	Microsoft	$38
Games
1	The Sims Deluxe	Electronic Arts	$20
2	Rise Of Nations	Microsoft	$35
3	MS Flight Simulator 2004: Century Of Flight	Microsoft	$31
4	MS Zoo Tycoon: Complete Collection	Microsoft	$30
5	Halo: Combat Evolved	Microsoft	$31
6	The Sims Mega Deluxe	Electronic Arts	$36
7	MS Age Of Mythology	Microsoft	$32
8	The Sims: Superstar Expansion Pack	Electronic Arts	$22
9	Call Of Duty	Activision	$36
10	Far Cry		$38
Business
1	MS Office 2003 Student/Teacher Ed	Microsoft	$133
2	QuickBooks 2004 Pro	Intuit	$277
3	QuickBooks 2004	Intuit	$200
4	MS Office 2003 Pro Upgr	Microsoft	$295
5	AD Guard	Valusoft (THQ)	$20
6	MS Office 2003	Microsoft	$389
7	Defender Pro 5 in 1	Global Star Software (Take 2)	$20
8	Act! 6.0	Interact Commerce	$168
9	MS Office 2003 Pro	Microsoft	$473
10	MS Office 2003 Student & Teacher Ed	Microsoft	$138
Home Education
1	Snap! Typing JC	Topics Entertainment	$5
2	Instant Immersion Spanish JC	Topics Entertainment	$18
3	Instant Immersion Spanish JC	Topics Entertainment	$10
4	Dora The Explorer Animal Adventures	Atari	$10
5	Adventure Workshop 4th-6th Grade	Riverdeep Interactive	$19
6	Adventure Workshop 1st-3rd Grade	Riverdeep Interactive	$20
7	Finding Nemo: Nemo's Underwater World Of Fun	THQ	$17
8	Jumpstart Preschool Classic JC	Vivendi Universal	$10
9	Jumpstart Toddlers JC	Vivendi Universal	$10
10	Adventure Workshop Preschool-1st Grade	Riverdeep Interactive	$19
List is based on units sold by twenty-three channel partners. For more information, please contact The NPD Group at (703) 376-6226.

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