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July  1999

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• Sun shines in Q4 with 37 percent profit gain
• Sun radiant over Jini magic in mobile networks
• Jim Barksdale joins Sun's board

Sun shines in Q4 with 37 percent profit gain

Net income for the quarter, ended June 30, was $395 million, up 37 percent from $288 million in the prior quarter, excluding a charge related to an acquisition, the company said.

Earnings per share were 48 cents, compared with 37 cents a year ago, also excluding the acquisition charge. A consensus of 19 brokers polled by First Call Corp. expected the company to post a profit of 46 cents per share.

Including the acquisition-related charge, net income and earnings per share for the fourth quarter of fiscal year 1998 were reported as $273 million and 35 cents, respectively.

The $3.52 billion revenue figure is up 22 percent compared with the fourth quarter of fiscal 1998.

"We had a terrific fourth quarter; our team really delivered. ... Sun's success has come as a direct result of our relentless focus on network computing," Scott McNealy, Sun's chief executive office, said in a statement.

A breakdown of Sun's sales and profits by product and region was not immediately available. However, Sun said it experienced record product shipments in the quarter, and saw a great amount of growth in emerging markets for electronic commerce and service providers.

For the full 1999 fiscal year, Sun reported revenues of $11.73 billion, up 20 percent over the prior year. Net income for the fiscal year was $1.16 billion, up 28 percent over the prior year, excluding acquisition-related charges for fiscal years 1998 and 1999.

Earnings per share for the year were $1.42, an increase of 23 percent from the previous year's results excluding the 1998 and 1999 acquisition charges. Including the charges, net income and earnings per share for the fiscal year 1999 were $1.03 billion and $1.27, respectively, Sun said.

Sun's stock was down 3.5 points to $67.19 on the Nasdaq stock exchange today.

--James Niccolai, IDG News Service

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Sun radiant over Jini magic in mobile networks

The message holds particular relevance in mobile-crazed Japan where on-the-go high schoolers already order tickets, send e-mail, and play games over their cell phones.

"The world where we are moving to is one where devices move around," said Jim Waldo, distinguished engineer at Sun, speaking at the Java Developer Conference 99 Tokyo here today. "We need to stop thinking about networks as statically placed machines, but as networks that can also move around."

In Sun's view, the future will offer a wireless community of mobile devices and peripherals that will need some way to talk to each other, Waldo said. The way they speak will be Jini, an architecture written in Sun's Java programming language enabling disparate kinds of devices, such as hard drives, printers and mobile phones, to communicate easily over a network.

When a Jini-enabled device, like a digital camera, is connected to a network, it sends out a message announcing itself and requesting services from other devices on the network. Another Jini-enabled devices, for instance, a printer, will "see" the message on a kind of virtual bulletin board, and send a message back offering its services. That return message will include data on how the printer is configured and what it needs to be activated. Devices never need to be configured to the network and they can be freely connected or disengaged from the network at any time, Waldo explained.

But for Sun to turn the Jini vision into reality, the company will probably require a strong vote of confidence in the technology from the Japanese developers and hardware makers attending the Java conference this week. Many of the attendees are the world's leading makers of the devices Sun wants to "Jini-ize."

Though few vendors have disclosed specific details on their Jini development efforts, several Japanese electronics and computer makers are working with the technology, including Fujitsu Ltd., Sony Corp., Toshiba Corp., Seiko Epson and NTT Mobile Communications Network Inc. (NTT DoCoMo).

An official at Sharp Corp. said today that his company is working with several partners, including the Yasuda Mutual Life Insurance Co. Ltd., on a system for the insurance industry that will enable Sharp's mobile devices to access data over a Jini-based network. The work should be completed by October, the Sharp official said, but he didn't provide further details.

Sun's Waldo emphasized the importance of mobile technologies in growing Jini, stating simply that it comes down to numbers. "There are more mobile phones sold today than there are computers sold," he said.

Some observers predict that in Japan the Jini technology will first appear in mobile phones. Japan is already an advanced market for mobile technology, with leading vendors here rushing out phone-based electronic commerce services. Sun argues that Jini will enhance those services.

Waldo said he foresees Jini-enabled stores where a customer's cell phone or PDA (personal digital assistant) is wirelessly connected to the store's network as soon as he or she walks into the store. Immediately, information about the price and availability of products becomes accessible on the individual's mobile device.

One cornerstone towards delivering on Waldo's vision will likely be Sun's recently announced deal with NTT DoCoMo, the largest cell phone provider in Japan. The companies agreed in March of this year to incorporate Java and Jini into DoCoMo's i-mode phones.

Launched in February, the i-mode service provides users with banking, ticket reservation, e-mail and limited Web surfing. I-mode has proved a hit here, with around 671,000 users as of yesterday, compared to the 277,000 Japanese who were using i-mode phones in early June, according to a DoCoMo spokesman.

The Japanese company will upgrade the service early next year with a Java-enabled phone that will offer more functionality, said Shigetaka Kurita, a content planner at DoCoMo. New gaming functions, online news and increased banking security are among the new features that will be available on the company's P501i phone to be shipped in early 2000.

The P501i is built for DoCoMo by Matsushita Electric Industrial Co. Ltd. At 13 centimeters tall, 4.3 centimeters wide and 2 centimeters thick and weighing just 89 grams, the P501i is not much bigger than a standard cell phone. The major physical difference is the LCD (liquid-crystal display) which takes up about half of the face or front of the phone.

Sun's Waldo contends that the Java and Jini architectures are more appropriate for next-generation devices such as the P501i because the technologies are more stable than the traditional operating systems used to run most computers.

"The unreliability we have come to expect with personal computers we won't accept with other devices. You will reboot your computer if it crashes, but if your microwave crashes you will take it back to the store," Waldo said.

--Michael Drexler and Rob Guth, IDG News Service, Tokyo Bureau

Resources

• Sun's Java site http://java.sun.com
• Last month's Jiniology column in SunWorld: http://www.sunworld.com/swol-06-1999/swol-06-jiniology.html
• Java- and Jini-related articles listed in the SunWorld Topical Index: http://www.sunworld.com/sunworldonline/common/swol-siteindex.html#Java

Jim Barksdale joins Sun's board

Sun's other board members include Scott McNealy, John Doerr, general partner at Kleiner, Perkins, Caulfield and Byers, Robert Long, senior VP and director of corporate planning at Eastman Kodak, M. Kenneth Oshman, president and chief executive officer, Echelon Systems Corp., A. Michael Spence, dean, at Stanford University's, Graduate School of Business, Judith Estrin, chief technology officer and senior vice president at Cisco Systems, and Robert Fisher, executive vice president and director of Gap Inc.,

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