Telephone-equipment maker Nortel Networks Corp. may sell or resize its optical-components business as it revamps operations to save money. The Canadian firm doesn't expect a meaningful recovery in the optical market before late 2003 or early 2004. "We are aligning our optical business model to where we see the industry going to ensure we are well-positioned when spending resumes," says Frank Dunn, president and chief executive. Dunn expects the overhaul of the firm's optical long-haul business to be completed by the end of the third quarter.

Intel has slashed the price of its Pentium 4 processors for desktops and notebooks 12-53%. The company's end-of-May price list shows a 2.4GHz version of the chip down from $562 to $400, while the 2.26GHz and 2.2GHz versions have been cut from $423 to $241. The biggest reduction came in notebook chips where a 1.8GHz mobile Pentium 4 fell from $637 to $348 and the 1.7GHz version dropped from $508 to $241. The 1.6GHz version was cut from $401 to $198.

Microsoft's antitrust woes are reflected in its new software patch for Windows XP that will let users choose among a variety of Web browsers, e-mail programs, audio and video players and instant messaging tools. Microsoft is taking the first step toward satisfying the terms of a settlement forged with the Justice Department last fall by allowing Windows users to select their own access and default programs for many functions through Windows XP Service Pack 1.

Global sales of communications chips and related optical components fell 38% in 2001, according to Gartner Dataquest figures that fully reflect the economic slowdown, decreased customer spending and the oversupply of microchips. Agere Systems retained its rank as the number one supplier in the hard-hit market, followed by Intel.

A "significant pick-up in purchasing of communications integrated circuits won't arrive any time soon," says analyst Quinn Bolton at CIBC World Markets in New York, but he also believes the market has bottomed. "While pockets of weakness likely will continue to plague certain communications IC segments," he says "certain end markets could see end-market growth through 2003," identifying Gigabit Ethernet, storage area networking equipment, wireless local area networking and voice-over Internet protocols.