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Posted: December 8, 2010 in Hardware

Exec shakeup lays blueprint for Sony’s future

Sony’s CEO has named an heir apparent.

Howard Stringer, while making some organizational tweaks, on Thursday chose Kazuo, or Kaz, Hirai to possibly succeed him at the helm of the iconic consumer electronics company.

Hirai, 50, rose up through the ranks in the music and video game businesses and has been the president and CEO of Sony Computer Entertainment, which produces the successful PlayStation franchise as well as the video game business. Now, he’s been tapped as the head of the entire consumer business, meaning not only video game consoles and titles, but TVs, Blu-ray players, notebooks, and more.

This is a pretty big deal. Hirai’s heading the business will mean changes in some ways, but it will also establish some consistency for whenever Stringer does eventually decide to leave. Here are the most important things about the new announcement.

Stringer’s “convergence” agenda should stay on track
Sony’s chairman, president, and CEO first laid out his plan at the Consumer Electronics Show in 2009, stressing that the future of consumer electronics was the convergence of PCs, TVs and other gadgets, and entertainment. That was inevitable given that smartphones and tablets are able to play downloaded apps, videos and music, and the emergence of lots of streaming entertainment content from the Web to TVs through video game consoles, set-top boxes and through the TV itself.

But that wasn’t necessarily as obvious two years ago. And Sony has historically struggled with different business divisions working together across music, video and software platforms. By putting everything–TVs, entertainment software, PlayStation, MP3 players, Vaio laptops–under one roof and a single executive, that actually encourages more cooperation across the company. It’s a way of securing his legacy at the company.

The guy in charge of video games is now in charge of TVs
TVs and audio were the jewels in Sony’s crown for decades. But today? Apple introduced the iPod a decade ago and basically dismantled Sony’s Walkman business. The TV business has been outpaced by Samsung, and hasn’t turned a profit in more than half a decade.

Hirai’s appointment shows how important the PlayStation business is to the company’s fortunes now. For many years, the consumer electronics divisions and video game divisions treated each other as almost separate companies. The PlayStation group is profitable and is responsible for Sony’s PlayStation Network, where games and movies can be downloaded to the PS3. By combining responsibilities for Hirai, now the same person will be responsible for the PSN and the Qriocity platform, which has services like Music Unlimited that allow songs to be bought and streamed to the PlayStation 3, Sony TVs, Blu-ray Home Theater systems, as well as a range of Sony’s portable devices.

He’s not another Stringer
Compared to Stringer, 69, Hirai is about two decades younger. As Sony’s iconic brand name ages, and as the cachet once associated with having a Sony stereo or TV has been replaced by the cachet of owning an Apple product, it’s not a bad move for Sony to pick a leader whose experience aligns him better with its core demographic: young, male gamers.

While Hirai lives in the United States now, he was born and raised in Japan. Longtime observers of the company would say that’s important for a Sony, whose founding and legacy is distinctly Japanese. As previously noted, Hirai grew up in the company and is recognized as being instrumental in the growth of its gaming business. Stringer was born in Wales and is a former journalist and media executive. He was brought into Sony to shake things up precisely because he was an outsider. It appears that experiment will soon be over.

This isn’t set in stone
In an interview with The Wall Street Journal, Stringer said that Hirai isn’t his successor for sure, but is “the leading candidate”. Just two years ago, Stringer had selected four executives that he dubbed the “four musketeers“, relatively young English-speaking Japanese execs that would help his turnaround the company’s fortunes. Hirai was one of them. Hiroshi Yoshioka was another, and he has now been charged with running a group parallel to the consumer business, the Professional and Device Solutions Group.

Stringer has been known to shake things up every few years. So if he does stay on until 2013, as some have speculated, it’s not entirely outside the realm of possibility he’ll change his mind yet again.

iOS 4.3 code hints at A5 processor in next iPhone

Apple just released the latest update to its iOS operating system, and already savvy coders have found signs that the company may be testing dual-core processors in the next version of the iPhone.

The iPad 2 is the first iOS device to ship with the A5, Apple’s new dual-core processor that succeeds the A4. The A4 had been released first on the iPad before making its way to the iPhone 4, then later to the iPod Touch and Apple TV.

Riffing off the discovery of the A5 processor’s code name within iOS 4.3’s code by Chronic Dev group member Chronic, iOS developer Filippo Bigarella found mention of “N94AP”, a code name that would signify a yet-to-be-released iPhone based on past device code names. The N94AP mention was then linked up with “S5L8940”, the name for the A5 within the iOS code.

Is this a definitive sign the next iPhone will sport a dual-core processor? Certainly not, but it would jibe both with last year’s processor refresh pattern of the iPad’s chip trickling down to other iOS devices, and advanced notice of other Apple products from within development code. That was most recently the case with the Verizon iPhone, which was referenced in iOS 4 code back in August, some five months before it was officially announced.

Wi-Fi causes cockpit screens to blank out

Boeing has confirmed that Wi-Fi signals caused cockpit displays to go “blank” during a recent test of its new generation of 737NG airplanes, but the aircraft maker says no planes with this problem have rolled off its production lines.

According to a blog post Thursday on industry news site, Flightglobal, this has prompted Boeing to halt installation of in-flight connectivity systems in all its planes including wide-body aircrafts.

The report explained that affected planes were installed with “Phase 3” of Honeywell’s display units (DU 3), and were going through electromagnetic interference (EMI) testing of Aircell’s Gogo in-flight connectivity system when the “blank screen” showed up.

It noted that tests were carried out with Wi-Fi radiation levels “higher than normal”, exceeding levels emitted even from a planeload of passengers’ laptop and mobile devices. These conditions are part of test requirements set by the U.S. Federal Communication Commission.

Honeywell confirmed the “momentary blanking” occurred during recent ground tests, but not in-flight, and the affected screens reappeared “well within Boeing’s specific recovery timeframe”. It further stressed that this was not a flight safety issue.

However, the Flightglobal blog noted that “fallout from the event is already occurring”, with authorities requiring 737NG operators to put placards in the flight deck indicating that Wi-Fi devices should be switched off. They are also prohibited from installing DU 3 units in the presence of in-flight connectivity systems.

This incident has also affected installations of AeroMobile’s eXphone. Airlines that placed orders for the system, such as Cathay Pacific, Turkish Airlines and V Australia, will not be receiving aircrafts with the eXphone as scheduled, until the display issue is addressed.

Singapore Airlines, one of the latest airlines to jump on the in-flight Web connectivity bandwagon, is partnering OnAir to offer Wi-Fi service on its aircrafts.

HP CEO: WebOS on all our PCs in 2012

Starting next year, Hewlett-Packard will include its mobile operating system, WebOS, on every PC it ships, according to a story quoting new CEO Leo Apotheker. WebOS will be offered in addition to Microsoft’s Windows, not as a replacement.

Apotheker reportedly made the comment in an interview with Bloomberg Businessweek. The motive for doing that is to augment the reach of the WebOS platform and hopefully attract more developers. There are currently 6,000 apps for WebOS, compared to 350,000 in Apple’s App Store, and 250,000 in Google’s Android Market. And while WebOS phone sales are far behind iPhones, and Android phones, HP is the largest PC maker in the world, selling more than 60 million units last year.

HP acquired WebOS when it bought Palm last year. WebOS was designed as the operating system for Palm smartphones, though HP has reworked the software to also work with its new line-up of tablets.

HP has said, from the minute it bought Palm, that it plans to expand the reach of WebOS, though few expected the jump to desktop and notebook PCs so quickly. But Apotheker has been trying to put his own stamp on the company since he arrived.

Apotheker is a former chief executive at software giant SAP. He was brought in to replace Mark Hurd as HP chairman and CEO after Hurd was forced to resign last August amid controversy surrounding improper expense reports and an alleged relationship with a female contract employee.

Apotheker is holding a forum with journalists in San Francisco on Monday, where he is expected to expand on his vision for the company. That will likely include more talk about his plans for WebOS, and hopefully details of how he plans to implement the new WebOS-on-every-PC strategy.

Asia CE makers ride innovation wave

SINGAPORE–Asian consumer electronics companies are rapidly shedding their manufacturing tag to become recognized as innovators, notes one industry observer.

During a media briefing here Wednesday, Brian Markwalter, vice president of research and standards at the Consumer Electronics Association (CEA), said creation and innovation is happening around the world and no particular region has a lock on them. His comments were in response to a question on whether Asian companies are easing their manufacturing emphasis to become IT innovators.

Pointing to Haier’s participation in this year’s Consumer Electronics Show (CES), Markwalter noted that the Chinese electronics maker was there as a brand to showcase its creativity. CEA is the organizer of the annual event held each January.

The rise of patent applications from Asian companies also shows the region is “fast” shifting away from pure manufacturing roots to become creative entities, he added.

According to the CEA’s projections, Asia–excluding Japan and China–will account for 12 percent of the consumer electronics purchases globally this year, churning US$115.7 billion in sales. Revenue growth of consumer electronics in the region will also increase by 12 percent this year, it predicted.

Citing research by the CEA on the consumer electronics industry, Markwalter said smartphones and tablets will be huge trends around the world this year.

Enterprise Wi-Fi needs change in mindset

SINGAPORE–The rise of mobile devices including tablets has driven enterprises to go the Wi-Fi way and look at providing pervasive Internet access that extends beyond just conference rooms.

Xirrus CEO Dirk Gates said: “There’s been a lot of interest in moving enterprise applications to those tablets and not to mention smartphones that are being used in the enterprise. We’re seeing interest in a robust, more pervasive Wi-Fi deployment, without dragging a ton of cable [to deliver Internet access].”

In an interview with ZDNet Asia during his visit here this week as part of a seven-city Asia trip, Gates explained that industries including logistics, transportation, education and healthcare are actively looking at deploying good wireless connections without incurring the high cost of implementing extensive cabling.

“There’s no way to wire the entire university or school. A lot of devices in the hospital are already Wi-Fi enabled so we’re definitely seeing more interest in using the ‘cell tower’ approach [to deploy wireless connectivity],” he said.

The cell tower approach, which was adopted by the mobile phone industry a decade ago, remains the most efficient base-station model, he noted. In this approach, multiple radio devices are hung in a circular fashion, resulting in a 70 to 80 percent reduction in device requirement for the deployment of wireless LANs.

It is also scalable where more capacity can be added, without the need to “hang up more radios”, he said.

Wi-Fi no longer just ‘good to have’
Gates revealed that some wireless networking vendors deploy basic WLAN equipment, install “a fancy controller software” in the backend and market it as an enterprise-class implementation. “It doesn’t cut it,” he said, adding that these devices cannot transmit data fast enough and companies may end up spending more than its allocated budget to improve the network performance.

He noted that this situation is the result of a higher focus on and “over-provisioning” of Ethernet connection, where Wi-Fi connectivity, for most enterprises, is often deemed to be just a “good-to-have” service.

“In the wired world, the attitude is to ‘over-provision’. If the idea is to pull one Ethernet cable [in a location], you will often end up with two,” he added. “Each employee today has two or three Ethernet tabs.”

“Wireless, on the other hand, is always under-provisioned. [For most companies], it’s always been about trying to figure out the fewest number of access points I can get away with to claim [there is] wireless coverage. So, you end up with thin coverage with very low capacity in your networks.”

Hence, Gates noted that a fundamental shift in mindset will be required if companies want to prepare for the next phase of connection deployment and cater to the growing adoption of mobile devices.

They should do so by starting to “over-provision” wireless access points, and setting up device structures that allow for greater capacity and scalability, he suggested.

When quizzed on the security aspects of Wi-Fi connections, he noted that with the current WPA2 and encryption technology, it is definitely more secure using Wi-Fi than a wired connection as the latter, for most enterprises, does not require login for access.

“If I’m a hacker, I’d be looking at the printer instead of trying to log onto a wireless connection as it is definitely much easier to just hook up my laptop [to a company’s LAN] and gain access to the company’s host server,” he explained.

Ethernet reversal of fortunes
An entrepreneur himself, Gates has been “round the block twice” where Xirrus is the second company he founded, after Xircom.

Confident of the company’s prospects, he said the Wi-Fi business will eventually overtake Ethernet switching in five years.

“Cisco [Systems] made the announcement a month ago that their Ethernet switching revenue has declined for the first time. While there’s a lot of speculation about competition, the more fundamental issue is that [Ethernet switching] will give way to wireless [platform],” he said.

He expects this “reversal of fortune” to happen within five years. However, the combined global market value then will be less than the current value of US$22 billion, where Wi-Fi accounts for US$2 billion and Ethernet switching US$20 billion. Wi-Fi revenue, though, is currently clocking rapid growth of 35 percent per year, he said.

iPad 2: Big trouble for Android tablets?

commentary We’ve all known more or less what was coming for a while. The iPad 2 was going to get slimmer and lighter, have a faster processor and better graphic engine, as well as sport cameras in the front and back–oh, and the already impressive battery life would be about the same. We also knew that if past Apple product upgrades were any indication, the new, improved iPad was going to be the same price as its predecessor. And it is, with the Wi-Fi-only version of the iPad 2 (16GB) starting at US$499.

So what’s this all mean for Android tablet makers? In a word: ouch.

To be fair, the folks at Motorola, Samsung, and BlackBerry-maker RIM knew what was coming, too, and there wasn’t much they could do it about. The Motorola Xoom, the first tablet to run Android 3.0 for tablets (also referred to as Honeycomb), has similar specs to the iPad (see Mac Observor’s spec comparison chart here).

It, too, has goodies like a dual-core processor, front- and rear-facing cameras, and HDMI out (Apple makes you purchase a separate cable). But it’s slightly heavier than the iPad 2, weighing a shade more than the original iPad. And its first iteration,with built-in Verizon data services, costs US$799–and you have to activate a data account to activate the device’s Wi-Fi (though you can cancel the service immediately and get a refund).

Motorola has hinted that a cheaper, Wi-Fi-only version will be available at some point, but it has yet to officially announce it. Dumb. It’s also said that the Xoom is 4G capable, yet you have to send your Xoom in to get it upgraded. Also dumb.

At least the Xoom is available for purchase. Many other tablets, like the much-hyped BlackBerry PlayBook and HP TouchPad (both non-Android devices), are still a few months off. And it’s unclear just what sort of significant advantages they might offer over the iPad 2, except that they’re not Apple products–and some people would simply prefer to go with an Apple alternative.

I don’t blame them. Competition is good. But with the iPad being so solid out of the gate and Apple’s marketing machine firing on all cylinders, even if you equal Apple on the specs and features front, if you can’t beat it on price–by a significant margin–you’re in trouble. Tie goes to the incumbent here. And the winner right now is Apple.

Alas, the tablet space isn’t the PC space, where Windows still holds a dominant position and PC makers can undercut Apple with lower-priced machines. As it stands, Apple’s the dominant player in the nascent tablet space, and it’s been able to strike market-leader deals on parts, which has made it very difficult for others to compete.

Nor is this the smartphone space, where carrier choice remains a big factor and more-affordable Android models with impressive features and designs have become very capable alternatives to the iPhone. Also, the BlackBerry remains strong, and there’s more differentiation in the smartphone arena, especially when you consider how many people prefer physical keyboards instead of the virtual-only option found on the iPhone.

A tablet, however, is basically a tablet. Maybe there’s some potential for a laptop/slate hybrid, but the reality is that the tablet is what it is: a slab with a touch screen, the thinner and lighter the better.

In fact, at this moment in time, the tablet market appears to have more in common with the MP3 player market. You remember that story? The iPod came along and quickly took a big chunk of the market. Sony was too worried about DRM issues to counter with anything. And others, like Creative Labs, offered compelling alternatives, but Creative couldn’t outprice or out-market Apple. Microsoft gave it shot with the Zune, and even though the Zune HD was a really nice product, it wasn’t better than the iPod Touch–and it wasn’t any more affordable.

So what should makers of Android tablets do? Well, they probably won’t–and shouldn’t–give up. But they do have to figure out a way to make their products appear more affordable than Apple’s, as well as differentiate them–and that doesn’t mean just touting Honeycomb (Android 3.0) and the Android ecosystem.

Unfortunately, the fact that a slew of very similar-looking Android-based tablets are coming to market this year actually works in Apple’s favor. Why? Because it creates confusion for the consumer (which Android tablet should I get?) and makes the iPad 2 stand out even more as the simple, safe choice.

Ultimately, the most logical play here is to go where Apple isn’t. And that means going smaller and more affordable. We’re talking Galaxy Tab land. As proven by the US$249 Nook Color’s success, which is probably the best-selling Android-based tablet on the market right now (Barnes & Noble hasn’t reported sales figures yet), there’s a big opportunity in the 7-inch tablet size. You hit that space with something slim and well-designed that offers decent performance at a reasonable price for a Wi-Fi-only model (US$299 or so) and you’re going to do well.

Of course, it’s not quite as simple as that, and it remains to be seen whether manufacturers can make a worthwhile profit at those price points. But that’s where manufacturers need to go. And they’d better go there soon, or Apple will get there first with its own iPad Mini.

iPad 2 makes its debut

The wait is over for eager Apple fans wanting the next-generation iPad. At an invite-only event in San Francisco Wednesday, the company took the wraps off the iPad 2.

Apple CEO Steve Jobs, who is taking a leave of absence from the company, returned to unveil the new product, which is expected to be a hot seller.

As anticipated, the new tablet has two cameras and is faster with dual-core processors. They just about double CPU performance and make the graphics speed 9 times faster, while using the same power as the processor from the first iPad. The iPad 2 is thinner than the older model. It went from 13.4mm in thickness on the old iPad to 8.8mm in thickness on the new one. And it works not only on AT&T’s 3G network, but also Verizon Wireless’ 3G network.

In terms of the technical specifications, the device is 9.5 inches high, 7.3 inches wide, and 0.34 inches deep. And it weighs just 1.33 pounds. It comes in three storage sizes for both the Wi-Fi and Wi-Fi +3G models: 16GB, 32GB, 64GB. And the rear camera is 720p and the front camera is “VGA-quality” suitable for video and still photography.

The new tablet will go on sale in the U.S. on Mar. 11 and will start at US$499. The original iPad, which went on sale last April, is now US$399 for the 16GB Wi-Fi only version of the product. The 3G version of the 16GB iPad is US$529. Apple will begin shipping the iPad 2 internationally to 26 countries starting Mar. 25.

The iPad 2 will also get some new features thanks to the latest release of the operating system, iOS 4.3. This upgrade brings a few new features like AirPlay support for apps that will include photo slideshows and porting audio from apps to other devices. Safari performance will be improved. This upgrade also adds the personal hot-spot feature that was introduced for Verizon iPhone owners. Other major tweaks include a software option to adjust whether the switch on the iPad is used to mute the volume, or lock the screen orientation, functionality Apple had changed after the iPad had been released.

The iOS 4.3 software version will be available on Mar. 11, and it supports iPad, iPhone (GSM), and iPod Touch (third and fourth generation).

Apple also introduced some new accessories to the iPad 2. The first is an HDMI video-out option that will allow people to port video out of the device and mirror what happens on another screen. Jobs said this was a big request from teachers. It will cost US$39 and works with all apps.

The other accessory is something called “Smart Covers”. This new case is a bendable flap that sticks onto the side of the device. It wakes up the iPad from sleep when you open it, and puts it to sleep when you close it. The cover uses magnets to grasp onto the unit, and align it. “You can add it in a second. You can remove it in a second,” Jobs said. The new case comes in five colors for the polyurethane version, and five as well for the leather. The polyurethane case is is US$39, and the leather one is US$69.

Also new to the iPad are some applications, including Apple’s iMovie and GarageBand applications, which are available for its Macs. The Apple iMovie app for the iPad will allow people to edit video right on their iPad and offers timeline scrubbing and clipping. The iPad uses gestures, so users can tap on parts of clips to add them to the timeline, as well as pinching pictures or icons to adjust things.

The iPad iMovie app also has an audio editor that lets you can adjust audio waveforms. Also included are 50 sound effects users can throw in their creations. Each video can have up to three audio tracks, in addition to a voice-over track you can record on the iPad’s microphone.

The GarageBand app, which helps teach people how to play musical instruments, has been adapted for the iPad. The application, which simulates different instruments, makes use of note dynamics, so that the iPad can tell how hard users are hitting the screen to affect the power of the note. This is handled via the accelerometer. Also included are “smart instruments,” which help novice musicians learn how to play. Similar to its desktop counterpart, the GarageBand iPad app can record whatever the user is doing and let him or her combine them together.

“Anyone can make music now, on something that’s this thick and weighs 1.3 pounds,” Jobs said. “It’s unbelievable. This is no toy. This is something you can use for real work.”

The iMovie and GarageBand iPad apps will each cost US$4.99 and will be available in the App Store Mar. 11.

The “Post-PC” era
Apple created a new category of product with the iPad, doing what others before it had been unable to do. In short, it successfully convinced consumers that they needed something in between a smartphone and a laptop or desktop.

Apple’s Jobs noted this accomplishment. But he added that the iPad goes beyond being just another computing device. And while competitors focus on technical specs of their own products in this new category, Apple is still focused on providing an experience.

“It’s in Apple’s DNA that technology alone is not enough,” he said during the presentation. “It’s technology married with liberal arts, humanities that yields us the result that makes our heart sing. And nowhere is that more true than in these post-PC devices. And a lot of folks in this tablet market are rushing in and looking at this as the next PC.”

From the start, the iPad was a hit. Apple began selling the iPad in April 2010 and it ended up selling a whopping 15 million iPads by the end of 2010, accounting for US$9.5 billion in revenue, according to Jobs. In the first fiscal quarter of 2011, the iPad has generated some US$4.61 billion for Apple, which is about 17.2 percent of the company’s revenue. Not bad for a product that nobody really needed a year ago.

Brian White with Ticonderoga Securities wrote in a research note this week that he believes Apple could sell about 27.36 million iPads in fiscal 2011, generating US$16.92 billion in revenue. He said that the iPad has turned into a crucial product for Apple and could represent one-third of Apple’s US$36.8 billion in incremental revenue that is modeled for 2011.

While the iPad is still hugely popular, the latest version of the device will face some competition. Unlike in 2010, this year there will not be just one or two competitors on the market, but instead there will be hundreds.

The most threatening competition could come from the top handset and computer manufacturers. Motorola is just now releasing its Xoom tablet, built on the latest version of the Google Android OS. Samsung has its Galaxy Tab line of products, which are also based on Android. Hewlett-Packard will introduce its WebOS-powered TouchPad this summer. Microsoft is also looking to get into the tablet market with a new OS that will bring Windows to the tablet form factor. And Research In Motion (RIM), the maker of the BlackBerry, is also set to introduce its tablet called the PlayBook.

But even with all this new competition, experts, such as CNET’s Donald Bell, believe that Apple still has a significant advantage over its competitors even if the new iPad 2 doesn’t offer too many more bells and whistles than the original version. He said in a recent interview with National Public Radio’s “All Things Considered” that Apple didn’t have to change things significantly on the iPad 2 to keep consumers interested.

“Apple has done something pretty special,” he said in the interview. “They have convinced consumers to buy a product that they don’t really need. They’ve taken smartphones, which is a kind necessary product, and laptops and desktops and sort of forced them aside to make a new market.”

Not only does Apple already have a significant lead in tablet sales compared to its competitors, it also has a lead in terms of applications offered for the device. Apple now has more than 65,000 apps that are made just for the iPad, Jobs said today. Meanwhile, Google has just released Android 3.0 OS, which is designed for tablets. And so far Google has far fewer applications that are specific to the tablet format in its marketplace. Jobs estimates the current number of apps for a Google tablet is only about 100.

Still, Google has proven to be a formidable competitor in the smartphone market. The Android operating system, which has been on the market for only a couple of years, is now on nearly 50 percent of smartphones shipped in the U.S. And the platform is gaining ground globally. The platform could prove popular for the tablet market as more manufacturers release products using the software.

After raid, hacker releases ‘bible’ for PS3 reverse engineering

A Playstation 3 hacker says he has released information about reverse engineering hypervisor technology used in the PS3 after his home in Germany was raided earlier this week, reportedly at Sony’s request.

In a comment to a post on his PS3 Linux and Hyper Reverse Engineering Blog, Graf-chokolo writes in the comments section: “Guys, SONY was today at my home with police and got all my stuff and accounts. So be careful from now on.”

After several readers expressed doubt about the legitimacy of the post, he says in another comment: “Guys, I don’t joke, it’s serious. And to prove it, I kept my word and uploaded all my HV reversing stuff. Upload it everywhere so SONY couldn’t remove it easily. Grab it guys, it contains lots of knowledge about HV and HV procs.”

He writes: “Here is my HV bible” and provides four links to sites where he placed his files. As of Thursday afternoon, the files had been removed from three of the sites, with one of the sites citing a copyright complaint.

Sony did not immediately respond to an e-mail request for comment, but games news site Kotaku reported that a representative from Sony Computer Entertainment Europe had confirmed the raid.

Sony is taking aggressive action against PS3 hackers. Last month, Sony requested a restraining order against George Hotz for releasing a jailbreak for firmware version 3.55 that allowed people to run home brew applications on the console. Sony says the action violates the Digital Millennium Copyright Act and the Computer Fraud Abuse Act, but Hotz disagrees. Game consoles are not mentioned in the DMCA. A U.S. District Court ruled in Sony’s favor, granting a temporary restraining order.

IBM reclaims server market crown

IBM handily claimed the server market share lead in the fourth quarter as the company rode its new mainframe and Power7 systems, according to Gartner. Overall, fourth quarter server revenue was up 16.4 percent from a year ago.

In the fourth quarter a year ago, IBM and HP were in a virtual tie in terms of server market share based on revenue. HP lost market share in the fourth quarter as IBM and Dell gained. Oracle took the largest market share hit in the fourth quarter as the company focuses on higher end systems.

Gartner said pent-up server demand fueled results. Overall, server sales delivered solid growth in the fourth quarter as the data center upgrade cycle continued.

Read more of “IBM reclaims server market share revenue crown in Q4, says Gartner” at ZDNet.

Lenovo chairman talks economics, future of PCs

newsmaker Liu Chuanzhi’s name may not be instantly recognizable in the United States, but at home in China he’s a technology and business celebrity.

Liu helped found Lenovo in 1984 with a group of 10 engineers in China at a time when the country was in transition. Moving from a planned economy to a market economy was hard enough, but Liu and colleagues also had to compete with Western companies attempting to insert themselves in the Chinese marketplace. After purchasing IBM’s PC business in 2004, Lenovo has today grown to the fourth-largest provider of PCs in the world, behind Hewlett-Packard, Dell and Acer.

Liu Chuanzhi, Lenovo
(Credit: Lenovo)

As chairman of Lenovo, Chuanzhi doesn’t come to the U.S. often. But during a rare trip to San Francisco last week, ZDNet Asia’s sister site CNET got the chance to sit down with him. We spoke shortly after his company delivered a promising earnings report, but the topics ranged from Lenovo’s efforts to grow its brand outside of China, to what happens to the personal computer in the “post-PC era”.

Here’s an edited portion of the interview, which was conducted with the help of an interpreter.

On why Lenovo keeps outgrowing the PC market overall:
“At the outbreak of the financial crisis, Lenovo’s main sales and profits were all based in China, so when the Chinese economy took a downturn, Lenovo’s performance took a very big hit. Over the last couple years a lot of attention has been paid to achieving more balanced growth, geographical balance both inside and outside of China, also (balance between) sales to enterprise versus sales to consumers. That’s why we’ve been able to maintain very steady growth.

“Deciding on this correct strategy was not a fluke–it was the result of senior management having repeated discussions and analysis of what the trends would be.”

Why the “post-PC era” is a good thing in the long run:
“Several years ago Lenovo realized that mobile broadband was on the horizon and we were working on integrating that into PCs. Then last year we introduced the LePhone (smartphone) and we’re about to introduce tablets. We brought out a product at CES, the U1, that you put your slate into the laptop, that was quite favorably received at CES.

“We find it rather exciting in this new era we’re going into that it marks the end of the ‘Wintel’ monopoly. It offers more room for innovation and choice of OS and CPUs. I think there will be more types of platforms. Right now, I think (the combination of Windows and Intel chips are) still the best choice for enterprise machines, but I think gradually the distinctions between consumer and enterprise machines will also change.”

On expecting the unexpected in business:
“When you’re in the field of high tech, there’s no telling when a dark horse might come out of nowhere with a new technology or business model, so we’ll likely encounter some setbacks, but it will be temporary. The most important thing is to have a strong cohesive leadership team that has the culture that will allow it to survive these setbacks and keep innovating and go its own way.

“I founded this company in 1984, and in those 26 years a lot of things have changed, in China and the whole world. A lot of companies set up in China around the same time aren’t there anymore or they can’t grow anymore. So that’s why I think that among all those companies, we’re still there and have a lot of energy and dynamism. It all boils down to strong leadership.”

Verizon CEO refutes claims of low iPhone sales

Reports of underwhelming iPhone sales on Verizon’s network seem to have been exaggerated.

That’s according to Verizon Wireless CEO Daniel S. Mead, who in an interview with The Wall Street Journal (subscription required) said that the carrier had sold more iPhone 4s during its launch period than any product so far.

Despite Verizon’s announcement that it had its most successful first-day sales ever during a pre-order period prior to the phone’s launch, alleged sales numbers from five of Apple’s stores pointed at sales numbers in the mid triple digits. As ZDNet Asia sister site, CNET noted at the time, this was just five of more than 230 Apple Stores that had been selling the Verizon iPhone, and the numbers didn’t include any hard data from Verizon’s own retail stores, where iPhone 4s were also being sold. Mead also told the Journal that 60 percent of Verizon’s sales had been online, which would overshadow some of the reported numbers from the two different retail venues.

Along with the inside look at the company’s sales, Mead also hinted to the Journal that Apple will bring a product to market that will work on Verizon’s “4G” long-term evolution (LTE) network. “They understand the value proposition of LTE, and I feel very confident that they are going to be a part of it,” he said.

After raid, hacker releases ‘bible’ for PS3 reverse engineering

A Playstation 3 hacker says he has released information about reverse engineering hypervisor technology used in the PS3 after his home in Germany was raided earlier this week, reportedly at Sony’s request.

In a comment to a post on his PS3 Linux and Hyper Reverse Engineering Blog, Graf-chokolo writes in the comments section: “Guys, SONY was today at my home with police and got all my stuff and accounts. So be careful from now on.”

After several readers expressed doubt about the legitimacy of the post, he says in another comment: “Guys, I don’t joke, it’s serious. And to prove it, I kept my word and uploaded all my HV reversing stuff. Upload it everywhere so SONY couldn’t remove it easily. Grab it guys, it contains lots of knowledge about HV and HV procs.”

He writes: “Here is my HV bible” and provides four links to sites where he placed his files. As of Thursday afternoon, the files had been removed from three of the sites, with one of the sites citing a copyright complaint.

Sony did not immediately respond to an e-mail request for comment, but games news site Kotaku reported that a representative from Sony Computer Entertainment Europe had confirmed the raid.

Sony is taking aggressive action against PS3 hackers. Last month, Sony requested a restraining order against George Hotz for releasing a jailbreak for firmware version 3.55 that allowed people to run home brew applications on the console. Sony says the action violates the Digital Millennium Copyright Act and the Computer Fraud Abuse Act, but Hotz disagrees. Game consoles are not mentioned in the DMCA. A U.S. District Court ruled in Sony’s favor, granting a temporary restraining order.

IBM reclaims server market crown

IBM handily claimed the server market share lead in the fourth quarter as the company rode its new mainframe and Power7 systems, according to Gartner. Overall, fourth quarter server revenue was up 16.4 percent from a year ago.

In the fourth quarter a year ago, IBM and HP were in a virtual tie in terms of server market share based on revenue. HP lost market share in the fourth quarter as IBM and Dell gained. Oracle took the largest market share hit in the fourth quarter as the company focuses on higher end systems.

Gartner said pent-up server demand fueled results. Overall, server sales delivered solid growth in the fourth quarter as the data center upgrade cycle continued.

Read more of “IBM reclaims server market share revenue crown in Q4, says Gartner” at ZDNet.

Lenovo chairman talks economics, future of PCs

newsmaker Liu Chuanzhi’s name may not be instantly recognizable in the United States, but at home in China he’s a technology and business celebrity.

Liu helped found Lenovo in 1984 with a group of 10 engineers in China at a time when the country was in transition. Moving from a planned economy to a market economy was hard enough, but Liu and colleagues also had to compete with Western companies attempting to insert themselves in the Chinese marketplace. After purchasing IBM’s PC business in 2004, Lenovo has today grown to the fourth-largest provider of PCs in the world, behind Hewlett-Packard, Dell and Acer.

Liu Chuanzhi, Lenovo 

(Credit: Lenovo)

As chairman of Lenovo, Chuanzhi doesn’t come to the U.S. often. But during a rare trip to San Francisco last week, ZDNet Asia’s sister site CNET got the chance to sit down with him. We spoke shortly after his company delivered a promising earnings report, but the topics ranged from Lenovo’s efforts to grow its brand outside of China, to what happens to the personal computer in the “post-PC era”.

Here’s an edited portion of the interview, which was conducted with the help of an interpreter.

On why Lenovo keeps outgrowing the PC market overall:
“At the outbreak of the financial crisis, Lenovo’s main sales and profits were all based in China, so when the Chinese economy took a downturn, Lenovo’s performance took a very big hit. Over the last couple years a lot of attention has been paid to achieving more balanced growth, geographical balance both inside and outside of China, also (balance between) sales to enterprise versus sales to consumers. That’s why we’ve been able to maintain very steady growth.

“Deciding on this correct strategy was not a fluke–it was the result of senior management having repeated discussions and analysis of what the trends would be.”

Why the “post-PC era” is a good thing in the long run:
“Several years ago Lenovo realized that mobile broadband was on the horizon and we were working on integrating that into PCs. Then last year we introduced the LePhone (smartphone) and we’re about to introduce tablets. We brought out a product at CES, the U1, that you put your slate into the laptop, that was quite favorably received at CES.

“We find it rather exciting in this new era we’re going into that it marks the end of the ‘Wintel’ monopoly. It offers more room for innovation and choice of OS and CPUs. I think there will be more types of platforms. Right now, I think (the combination of Windows and Intel chips are) still the best choice for enterprise machines, but I think gradually the distinctions between consumer and enterprise machines will also change.”

On expecting the unexpected in business:
“When you’re in the field of high tech, there’s no telling when a dark horse might come out of nowhere with a new technology or business model, so we’ll likely encounter some setbacks, but it will be temporary. The most important thing is to have a strong cohesive leadership team that has the culture that will allow it to survive these setbacks and keep innovating and go its own way.

“I founded this company in 1984, and in those 26 years a lot of things have changed, in China and the whole world. A lot of companies set up in China around the same time aren’t there anymore or they can’t grow anymore. So that’s why I think that among all those companies, we’re still there and have a lot of energy and dynamism. It all boils down to strong leadership.”

Intel unveils Thunderbolt data transfer tech

Intel on Thursday outlined the specifics of its Thunderbolt data connection technology.

Formerly called Light Peak, the current copper-based generation of Thunderbolt boasts 10Gbps data transfer speeds between computers and devices–that is, twice the speed of current USB 3.0 throughput. Future iterations of the specification are expected to move from copper wire to a fiber-optic connection, which Intel has said could one day allow for throughput rates up to 100Gbps.

One of Intel’s goals for Thunderbolt is to simplify the various connections going from PCs and connected devices. Thunderbolt can transmit both raw data and audio-video information simultaneously, using existing DisplayPort and PCI-Express data protocols. As each Thunderbolt port has two data transmission channels, the technology is also bidirectional, meaning that it can both transmit and receive data. According to Intel, each port will be able to send and receive data simultaneously, at full 10Gbps bandwidth in both directions.

By using the existing DisplayPort and PCI-Express data protocols, Thunderbolt will affect a wide number of peripheral devices, ranging from desktops and laptops, as well as monitors, external hard drives, cell phones, and tablets, among others. Apple’s new MacBook Pro, also announced Thursday, is the first Thunderbolt-equipped computer. Intel also announced that Aja, Apogee, Avid, Blackmagic, LaCie, Promise, and Western Digital will all have Thunderbolt-based products, although the technology is certain to spread to every major computer and peripheral vendor before long.

Report: Next iPhone might be cheaper, but not smaller

Is the next iPhone going to be smaller? Bigger? Or maybe cheaper?

“Cheaper” is the latest in a series of confusing and seemingly contradictory rumors about the nature of the next iPhone Apple has in store. Today the New York Times chimed in to say that contrary to a previous report in The Wall Street Journal, the next iPhone is not going to be smaller, but Apple is working on ways to make it cheaper and more accessible for buyers.

Apple is focused on making the iPhone attractive to a larger audience, according to the Times report. That includes offering a phone more easily controlled by voice commands for those who have no interest in or can’t use a virtual keyboard.

As for how the company is considering bringing down the cost of the phone, it wouldn’t be by downsizing the screen. Rather, using cheaper internal components, less memory, or a lower-quality camera are options Apple is considering, according to the Times source who has apparently worked on several iPhone prototypes.

Another source says it wouldn’t make sense to make a smaller iPhone because of how it would affect developers who make their apps formatted to a particular screen size. A “senior Apple executive” also tells the Times that Apple isn’t interested in having a lineup of multiple models of iPhones.

It doesn’t sound like a cheaper iPhone is a sure thing yet, just something Apple is thinking about. One thing’s for sure: the next iPhone isn’t expected until this summer. So anticipate many more months of rumors to come.

‘Leaked’ Dell plans date Windows 7, 8 tablets

Dell’s recently unveiled Windows 7 tablet could be in the hands of consumers as soon as mid-May, with a follow-up device in January that would run the next version of Windows.

That’s according to Android Central, which, along with sister site WP Central, says it has acquired from a tipster rough release plans for Dell’s portable devices.

The plans–which include information on a handful of Android devices, including four tablets–also tease a version of Dell’s Venue Pro Windows Phone 7 device, which will bring “additional features and enhancements” and arrive in mid-April. That’s followed in July by “Wrigley”, a Windows Phone 7 slider that will sport a “Next Gen” version of the OS, which could simply be referring to Microsoft’s planned update that will bring multitasking and a beefed up version of the IE9 browser.

As for the Windows tablets, there’s “Rosemount” which is the 10-inch, Windows 7 tablet Dell unveiled in wooden mock-up form just last week. That’s slated for arrival in mid-May, with “Peju”, a “Windows 8” version, arriving in January 2012.

Microsoft, of course, has made no announcements on the date, planned features, or even the name of the next version of Windows. The most recent nugget of information given out by the company was at CES back in January, when it took the cover off plans to support ARM architecture so the OS could run on a wider range of devices.

When asked about the Android Central and WP Central reports, a Dell representative said the company does not comment on speculation or unannounced product plans.

CEO: Intel-powered smartphones arriving this year

BARCELONA, Spain–In a trade show dominated by phones and PCs using ARM-based processors, Intel chief executive took the stage to tout his own x86 chips.

Intel, of course, grew to power on the basis of its x86 chip family, including Pentium, Xeon, and now Core and Atom processors. Today’s smartphones, though, use ARM-based chips from companies such as Qualcomm, Texas Instruments, and perhaps most concerning for Intel, now Nvidia as well. Those products are hogging the spotlight at the Mobile World Congress show here.

So when will Intel-powered smartphones arrive?

“This year”, Otellini said, though he was reserved about further details. “We can’t preannounce our customers. I think it’s going to be pretty exciting.”

Mobile devices have been a painful experience for Intel for years, but it’s clear the technology remains a priority. Microsoft, like Intel a PC-generation company that’s also been a mobile-market laggard, inked a high-profile partnership with Nokia to try to accelerate its push to relevance. Intel clearly understands the urgency, too.

“We see an emerging class of ultramobile devices,” Otellini said. There was a “seminal event in the fourth quarter. Smartphone shipments passed PC shipments for the first time”.

And yet tablets and smartphones will live alongside PCs. Otellini defended the PC business’ 17 percent growth last year, and said customers won’t settle on just one machine.

“No single device wins,” Otellini said. “We don’t see an environment where one machines satisfies all needs. At least for the next four to five years, we’re likely to see multiple devices and multiple form factors simply because people want to do multiple things.”

In his own speech, though, Softbank CEO Masayoshi Son said that PCs can be replaced by tablets. He made the switch completely a year ago, and said as well that every one of Softbank’s employees gets an iPhone and iPad.

“I’m using this tablet every day, everywhere I go–even in the bathroom,” Son said, holding up an unidentified device. “In the last 12 months, I’ve never touched the PC.”

Asked during a panel discussion after his remarks where he’d invest with the intent for returns over the next five to 10 years, Otellini had a quick response: “Batteries.”

“We can’t keep using lithium ion,” Otellini said, referring to the standard battery format. “It’ll be silicon-based, higher-capacity, longer-life. Whoever invents that is going to make a fortune.”

Intel has been at the center of a PC ecosystem with companies offering operating systems, processors, and computers. This horizontal integration is not as common in the mobile phone market–perhaps most notably today with Apple’s iPhone, whose vertical integration extends all the way through the app store.

Otellini sees an end to vertically integrated, proprietary technology, though.

“Computing technology is something that always starts out closed,” he said, pointing to the bygone ages when mainframes and later minicomputers ruled the industry. “Over time, people evolve on those. You create standards. You have millions of people developing on them. What you see is a very normal process of development and diffusion of technology.”

“In general, to harness all the abilities of all the engineers in the world and all the developers in the world, open wins,” Otellini said.

One area where Intel evidently hopes to get an edge in the mobile world is security. Power-efficient processors and network connectivity are essential, but they’re not enough.

“I contend security is going to be as important a feature set as all these other features,” Otellini said.

Another feature he likes is WiDi, short for Intel Wireless Display, which lets people beam video from a PC to a TV. It’s not just for PCs, though: “We’ll put this technology next year into tablets and into phones,” Otellini said.

Apple securing US$7.8B worth of Samsung displays, memory?

When Apple announced earnings last month, the company’s CFO mysteriously dropped a bit of info about a big contract the company signed worth US$3.9 billion. He declined to elaborate further except to say that it was for product components that Apple feels will be central to its future products.

It’s not unusual for Apple to sign large contracts with suppliers to ensure its own access to certain components as well as make it difficult for its competitors to get similar parts. Apple did it with LG for displays two years ago, and is regularly the largest buyer of flash memory in the world.

Still, CFO Peter Oppenheimer’s sly mention got the guessing game going as to what for and with who this contract could be. Now we have a hint. The Korea Economic Daily reported that Samsung and Apple are working on a contract agreement worth US$7.8 billion. Apple would reportedly get a variety of components in return: LCD panels, processors for mobile devices, and flash memory. Samsung and Apple have worked together often, but this would make Apple Samsung’s largest customer, according to the report.

Now, $7.8 billion is exactly twice the US$3.9 billion Apple mentioned last month. It could be that half of the Samsung order Apple is placing, or US$3.9 billion of it, is going toward one specific component, such as high-resolution displays. It is widely assumed that those parts from Samsung are for future models of iPhones and iPads. Touch screens and high-resolution displays are key ingredients to both products.

HP Pre3 turns Palm’s smartphone pro

HP has unveiled the business-focused Pre3, the third iteration in a smartphone line bought up by the company when it acquired Palm last year.

The original Palm Pre and the Palm Pre 2, were pitched at the general public, but the HP Pre3, announced on Wednesday, is being promoted as an enterprise device. The handset, which uses the WebOS operating system that HP also intends to build into PCs, delivers significant improvements on its predecessors in terms of screen size and resolution, processor power and keyboard size.

“In the suite of WebOS products we’re introducing today, Pre3 is our premier phone, designed for the speed of business,” Jon Rubinstein, former Palm chief executive and current head of HP’s Palm Global Business Unit, said in a statement. “It enables professionals to accomplish more of their important workday tasks while easily keeping their fingers on the pulse of their personal lives.”

Read more of “HP Pre3 turns Palm’s smartphone pro” at ZDNet UK.

HP unveils TouchPad tablet, WebOS headed to PCs

Hewlett-Packard (HP) today took the wraps off its long-anticipated tablet, a 9.7-inch device it’s calling the TouchPad, along with the bombshell that its WebOS is headed to PCs.

The TouchPad will run the company’s WebOS, which it acquired along with Palm as part of a US$1.2 billion deal in April. Among its list of features are: a 1024×768 pixel display, a weight of 1.5 pounds, 13mm thickness, front-facing cameras for video chat, 16GB or 32GB of built-in memory, support for Adobe’s Flash, Beats by Dre speakers, and a 1.2GHz dual-core Snapdragon processor.

Initially the TouchPad will be offered as a Wi-Fi only device, though HP said it plans to release a version with 3G/4G mobile connectivity later on down the line.

But the TouchPad will not be the largest device to run HP’s WebOS. At the very end of the company’s unveiling, HP Executive Vice President Todd Bradley said that the company plans to tweak the OS to work on personal computers as well. That includes both laptops and PCs. Timing on that was not announced, but considering HP’s top spot in the world of PC makers, the news is likely to have a dramatic effect on the PC landscape.

New phones
Along with the TouchPad, and news of bringing WebOS to PCs, HP announced two new smartphones that will run on the company’s WebOS platform. The first being a third-generation version of the Pre, which in mid-2009 was the first device to ship with the WebOS operating system.

The new version of the Pre doubles the display resolution of the previous model, adds HD video recording, and a front-facing camera, along with squeezing in a 1.4GHz Qualcomm processor. HP is offering two versions of the Pre 3, one that’s HSPA plus, and another that’s an EVDO Rev A World phone. Either can be had with 8GB or 16GB of memory, and will ship out “this summer”.

The other new phone is called the Veer, which HP is positioning as an alternative to what the company called “jumbo phones” during its presentation. The Veer is akin to a scaled-down version of the Pre in terms of its size, packing a similar slide-down keyboard form factor, HSPA plus, 802.11 b/g Wi-Fi, Bluetooth 2.1 with EDR, 8GB of storage, and an 800Mhz Snapdragon processor.

Similar to HP’s other WebOS phones, the Veer can also function as a Wi-Fi hot spot to provide connectivity with other electronics. HP says it will begin shipping the Veer to customers in the spring, though the company did not specify the price.

Names and preliminary specifications for all three of HP’s new devices were leaked ahead of the company’s event earlier today on HP’s own sales site.

Web OS updates, future
As part of the new device launch, HP also detailed WebOS 2.1, which the company says adds 50 new features, including things like voice dialing and improved multitasking. That will be arriving in all three new devices, and will be going out to older devices like the Pre 2 as a software update.

WebOS 2.1’s big new feature is that it adds inter-connectivity between WebOS devices to let users share information between tablets and their WebOS smartphones. This includes application notifications, as well as things like Web browser history using a new feature called “Touch to Share” that begins that data transfer once users get two WebOS devices within near proximity to one another:

Another new feature as part of WebOS 2.1 is a photo gallery feature called Exhibition, which HP says can wirelessly print to its line of HP printers. This lets users swipe around photos that have been stored on the device, as well as photos that are stored in places like Facebook.

As for the trick to bring WebOS to full-size PCs and notebook computers, HP did not provide a specific timeline.

Report: Next-gen iPad now in production

The Wall Street Journal, citing “people familiar with the matter,” reported that a new version of Apple’s iPad is now in production–and it will thinner and lighter than the debut model.

The device will also have at least one camera on the front, more memory and a more powerful graphics processor. But expect the same display resolution. It will be available through both Verizon and AT&T but not Sprint or T-Mobile.

The WSJ said it didn’t have details on the pricing.

Read more of “WSJ: Next-gen iPad now in production; Tablet wars heating up” at ZDNet.

Dell unveils 10-inch Windows 7 tablet

Dell expanded its foray into tablets with a new 10-inch Windows 7-based device designed, the company said, for users “who need greater mobility, as well as IT organizations that demand control, security, manageability, and integration with existing infrastructure investments”.

The Windows 7 Business Tablet, which will run on an Intel processor, could be available by the middle of the year.

The tablet was among 39 new products unveiled at the company’s Dell Means Business event in San Francisco on Tuesday morning. They include laptops, desktops, workstations, and a convertible tablet, the Latitude XT3 (a follow-up to the laptop/tablet hybrid XT2).

But the news out of the event likely to grab the most attention is the Win tablet, even though details on specs remain scant and we don’t yet have a price or a release date beyond sometime later this year.

Businesses want Windows because it fits into the IT management scheme, Steven Lalla, vice president and general manager of Dell’s commercial client product group, said at the event. Not to say Android doesn’t, he added, but he maintained that a bigger chunk of the business sector wants to go the Microsoft route.

The new touch-screen tablet, however, will also come in a 10-inch Android version, apparently named the “10-inch Android Tablet”, at least for now. That means neither version will fall under the Streak banner.

The Latitude-E series of laptops, meanwhile, has gotten a refresh. The new Latitude E5000 laptops, starting at US$859, come in 12-, 13-, and 14-inch models that feature Intel second-generation core processors, new graphics and memory, and backlit keyboard options.

As expected from a business laptop, they have hard-drive accelerometers and remote IT features, including remote data deletion. The keyboard is also the same across the entire line, which the company says will make it easier for business workers to switch devices.

But while IDC estimates that one third of the world’s workforce will be mobile by 2013, and Dell took great pains to emphasize that segment, the company also focused on its three new OptiPlex desktops, a new small form factor all-in-one design, and an update to its Precision workstation line.

“We have 30 years in which the PC has proven to be able to adapt itself to the environment,” said Rick J. Echevarria, vice president of Intel’s Architecture Group, adding that “rumors of the death of the PC have been greatly exaggerated.”

The new Optiplex desktops start at $650. They have the new Intel vPro processors, planned compatibility with the desktop virtualization lineup, and tool-free access to system components (meaning the back just pops off). Dell also said that since none of these systems is scheduled to ship in the next 30 to 45 days, they should go out with the updated version of Intel’s Cougar Point Sandy Bridge-compatible chipset, which does not contain the recently discovered Cougar Point SATA flaw.

Dell says it interviewed 7,000-plus Gen-Y customers, IT managers, and other business segment customers to figure out what people want out of Dell’s business products.

CNET reporter Josh Lowensohn contributed to this report.

Samsung admits Galaxy Tab sales ‘quite small’

Samsung has admitted that the reported 2 million sales figure for its Galaxy Tab device refers to the volume of units shipped to retailers and wireless companies, and not actual number sold to consumers, according to a news report.

The Korean electronics giant dropped the revelation during its quarterly earnings call last week, according to a report Monday in the Wall Street Journal.

The article quoted Lee Young-Hee, Samsung’s head of mobile marketing, to say that the number of Galaxy Tabs sold to consumers has been “quite small”. The executive did not provide actual sales figure.

Lee, in a response to an analyst, described Samsung’s “sell-in” to be “quite aggressive” and around 2 million, compared to its “sell-out” which was “quite small”. Sell-in refers to Samsung’s sales to distributors, while sell-out points to distributor’s sales to consumers.

Three months following the official release of the tablet, Samsung announced that 1 million Galaxy Tabs were sold in December last year, growing later to 2 million in January, stated the Wall Street Journal.

Young said in the article: “We believe, as the introduction of a new device, it was required to have consumers invest in the device. So therefore, even though sell-out wasn’t as fast as we expected, we still believe sell-out was quite OK.”

While she did not provide a forecast, Young said Samsung is “quite optimistic” about 2011 sales. “As you know, the tablet is relatively new and we need to see how the market develops before we give any firm numbers,” she said in the report.

The company’s first Android-powered tablet, touted as a close rival to Apple’s iPad, made its debut in Singapore last November.

Meanwhile, Microsoft last week announced it sold more than 2 million Windows Phone 7 devices, but had stated that the figure represented handsets sold to mobile operators and not consumers.

Intel faces US$1B bill from Sandy Bridge flaw

Intel has revealed a major hardware bug with computers using the new Sandy Bridge processor, which will cost the chipmaker US$1 billion, the company said on Monday.

The bug, which Intel said will cost it some US$1 billion in lost sales and repairing and replacing systems in the market, is not in the Sandy Bridge processor itself but in the accompanying Cougar Point chipset. The problem will delay the launch of dual-core consumer systems based on the architecture by “a few weeks”, the company said.

“Intel has discovered a design issue in a recently released support chip–the Intel 6 Series, code-named Cougar Point–and has implemented a silicon fix,” the company said in a statement. “In some cases, the Serial-ATA (Sata) ports within the chipsets may degrade over time, potentially impacting the performance or functionality of Sata-linked devices such as hard-disk drives and DVD drives.”

Read more of “Intel faces $1bn bill after Sandy Bridge bug is laid bare” at ZDNet UK.

Android smartphone sales take global top spot

Shipments of Android phones overtook Symbian-based smartphones during the fourth quarter of last year, according to a Canalys report released Monday.

Figures show that over the course of the 2010 global smartphone shipments increased by nearly 80 percent in comparison with 2009 and that in the final quarter of the year 101.2 million smartphones were shipped.

“2010 has been a fantastic year for the smartphone market. After a difficult 2009, the speed with which the market has recovered has required real commitment and innovation from vendors and they have risen to the challenge,” Canalys vice president and principal analyst Chris Jones said.

Read more of “Android smartphone sales take global top spot” at ZDNet UK.

Is Apotheker’s ‘coolness’ quest what HP needs?

When it comes to being a leader in the tech industry, how important is the “coolness” factor? Clearly, the iPhone and the iPad are cool products, therefore making Apple a cool company. Android’s coolness factor is also on the rise–scoring a few extra points on the coolness scale for Google, as well.

But can HP–an old school tech company right up there with IBM–score some coolness points to drive its popularity among consumers? New CEO Leo Apotheker is pretty sure it can. And to do so, the company is getting ready to generate some buzz with a news event–a la the Apple news events–next month to unveil the work it’s done on WebOS, the mobile operating system it scored with its acquisition of Palm.

In an interview with the BBC, Apotheker–former CEO of the ultra cool SAP–said that the days of making an announcement about an upcoming product and then losing that excitement because the product won’t ship until months later are over. He told the BBC:

HP will stop making announcements for stuff it doesn’t have. When HP makes announcements, it will be getting ready to ship. That’s a simple management decision, I don’t need to re-engineer the tanker [HP] to do that.

Read more of “Is Apotheker’s quest for “coolness” the spark that HP needs?” at ZDNet.

Microsoft goes on the iPad offensive

Microsoft may have laid out its plans to have Windows running on any device while unveiling the next version of Windows at CES earlier this month, but it’s not there yet. In the meantime, we’re still stuck with the current version of Windows, which, for better or for worse, cannot fit into the types of devices its successor promises to fit.

That very situation–along with a lack of product from Microsoft’s hardware partners, has led to a relative dearth of Windows 7 in tablet PCs. It can also be argued that it’s responsible, in part, for what has turned out to be much stronger than expected sales for the iPad, of which Apple sold 7.33 million units during the last three months of 2010, nabbing the “best-selling tech gadget in history” title following its introduction.

But Microsoft’s got a plan to position Windows 7 as the better of the two computing platforms. In a set of slides sent out to its reseller partners, and acquired by ZDNet Asia’s sister site ZDNet, Microsoft has outlined the various ways in which Windows offers more security and breakout features, while also being more of a chameleon–working its way into more than just one hardware form factor.

The 10 slides, which you can view on ZDNet, focus mainly on the enterprise, highlighting key differences where Windows checks all the boxes for things like getting work done offline, supporting Microsoft Office and its data synchronization tools, and working with existing lines of business applications. But Microsoft also takes the iPad to task on compatibility with things such as support for peripherals, security protocols, Adobe’s Flash and Microsoft’s own Silverlight.

At the heart of Microsoft’s argument, though, the company paints the iPad as a consumption device that doesn’t play nice with existing enterprise security or application standards. To back that up, the company breaks down the ways in which Windows 7 slate form factor PCs have three distinct advantages over the iPad: optimization for online and offline data use, a design for both consuming and creating content, and support for peripherals. Microsoft also highlights Windows’ pen and writing technology, speech recognition, and touch support, alongside its natural user interface and video technologies, all of which it deems to be “rapidly changing”.

For companies on the fence about bringing the iPad into their business, Microsoft is going with a “one size does not fit all” approach, noting that some companies may need devices that work better with their security and compliance needs. The more telling look, though, is what Microsoft is trying to pitch to companies already using, or plan to use, Apple’s iPad. Microsoft is telling those partners to “implement a Virtual Desktop Infrastructure (VDI) to reduce risk in your enterprise”, meaning that they’d be making use of tools like Microsoft’s Hyper-V Server, and App-V.

During last year’s CES keynote, Microsoft’s CEO Steve Ballmer paid special attention to a group of Windows 7 slate concepts, though the only one of the bunch that made it to consumers’ hands during 2010 was HP’s Slate 500 device. At this year’s show, slates were all but missing from the company’s keynote, instead being replaced by myriad devices designed to show off Windows’ next ARM capabilities. What’s still unclear is whether Microsoft’s more nascent, though already ARM-friendly, Windows Phone OS will make its way into a tablet form factor, something speculated about since the platform’s introduction at last year’s Mobile World Congress.

This article was first published as a blog post on CNET News.

Android smartphone to rocket into space

A UK-based team of researchers plans to launch a smartphone-bearing satellite to see if the phone will work in space.

The Surrey Training, Research and Nanosatellite Demonstrator (Strand-1) is scheduled to go into orbit around the Earth with a £300 (US$480) smartphone payload, Guildford-based Surrey Satellite Technology Ltd (SSTL) announced on Monday. The project is designed to show off the capabilities of a satellite built using commercial, off-the-shelf components.

“If a smartphone can be proved to work in space, it opens up lots of new technologies to a multitude of people and companies for space who usually can’t afford it,” Strand-1 lead researcher Chris Bridges said in a statement.

Read more of “Android smartphone to rocket into space” at ZDNet UK.

Android handsets drive HTC profits

HTC increased its overall profits by 75 percent during 2010 in a year-on-year comparison with 2009, helped in part by the shipment of 9.1 million phones during the final quarter of the year, the company said last week.

The Taiwan-based company–which held its annual financial summary conference call on Jan. 21–said that took just over half of its annual revenue, NT$141 billion (US$4.8 billion), in the United States.

HTC also pointed out that in other markets, such as Europe and Asia, the launch of its Desire and Wildfire handsets–both of which run the Android operating system–successfully boosted its results during the period.

Read more of “Android handsets drive HTC profits” at ZDNet UK.

Acer not abandoning Netbooks in favor of tablets…yet

Acer wants you to know that it hasn’t given up on Netbooks. At least, not yet.

Despite recent rumors to the contrary, and a CES 2011 chock-full of tablets, Acer sent out a press release on Wednesday specifically confirming that the company won’t be leaving the Netbook business.

According to the press release, “Mobility, which has always been part of Acer’s DNA, finds a new form of expression in the range of tablets on offer, which feature various display sizes and models designed to fit different kinds of usage scenarios. Acer recognizes that the computer market is changing.

“As PCs are no longer only used to create content but are more and more becoming consumption tools, new devices and new form factors are appearing. This means the range of devices available to users is getting wider and tablets are just another piece of the mosaic. Therefore, they will find their space next to Netbooks and notebooks.”

Acer’s press release also points out the range of options includes a 7- and 10.1-inch Android tablet, as well as a 10-inch Windows tablet. As we remarked last year, Acer’s wide range of tablet offerings suggests that bets are being hedged as to where future ultraportable computing will head. That’s no different than other companies, really: Asus’ CES 2011 press conference featured a spectrum of tablet hybrids, and even Apple offers a choice of iPad or 11-inch MacBook Air for on-the-go alternatives.

So, rest easy, Atom Netbook lovers: seems like the venerable, affordable keyboarded 10-incher is still here, for now. The only question is, how long will it stay?

This article was first published as a blog post on CNET News.

Intel touts Sandy Bridge media capability

SINGAPORE–In a show-and-tell of its latest generation of processors, Sandy Bridge, Intel touts its new built-in graphics capability as “future proof” and a strong appeal to mainstream users.

Speaking at a media briefing here wednesday, Patrick Liew, Singapore country manager for the chip giant, said consumers are no longer concerned about speed of processors. Instead, they are more concerned about user experience, he noted.

Liew added that the new chips with integrqated graphics ability suits mainstream users who are now creating media to share online.

More details to follow…

EMC wants in on hybrid cloud

SINGAPORE–Private and public clouds are fast converging and EMC wants to be “at the intersection” as demand for the hybrid cloud model grows in the new year, says company exec.

Speaking with Asia-Pacific reporters at a briefing here Tuesday, Steve Leonard, president of Asia-Pacific and Japan at EMC, said the convergence of private and public cloud is fast becoming a reality.

“We know that the private cloud and public cloud need to work together. No company can have everything on its own inside the four walls. And no company at this point in time is going to move everything that it does to a public cloud,” Leonard said.

Since the company has worked on both cloud deployment, EMC wants to be at the intersection when hybrid cloud emerges as a business model that enterprises demand, said Leonard. Last year, the storage vendor focused on bringing data centers to private clouds and also worked with service providers and telcos on public cloud projects, he said.

Trust and integrity will play key roles in the growth of both private and public cloud, he added, noting that cloud “can only occur with trust”.

Leonard also pointed to the consumerization of IT as one of the major trends EMC is expecting to play out in the new year. This, he said, will lead to higher consumption of data as more users gain access to mobile devices and, in turn, are encouraged to create even more information, he said.

Another major trend to emerge this year is the rise of real-time business analysis and growth of petabyte-scale applications.

Leonard explained that, historically, business intelligence and analytics have been focused on analyzing information after an event. This method of business analytics is “not very helpful” for businesses that need tools with the capability to “crunch through” a large amount of data so they can make decisions in real-time, he said.

According to EMC’s vice chairman, Bill Teuber, the company last year acquired companies such as Greenplum and Isilon to solve the challenges presented by the emergence of “big data”.

Teuber said it is not possible for an organization to “create every new idea” and, as such, EMC will choose to acquire companies to complement its internal research and development (R&D).

He noted that the storage vendor drives innovation through both R&D and acquisitions, adding that EMC spent US$17 billion over the last five years supporting these two activities.

“Our core belief is that in good times and bad time, we need to over-invest in R&D,” he said. He added that despite the economic downturn, EMC still allocates 11 to 12 percent of its annual revenues to R&D investments.

Internet devices to hit 150M in 2015

Consumers’ penchant for tablet devices will boost worldwide demand for portable Internet devices running on “lite” operating systems such as Apple’s iOS and Google’s Android mobile operating systems (OSes), according to a new Ovum study.

Released Monday, the report revealed that the global shipment of portable Internet devices, which include the Apple iPad, Android-based tablets such as Samsung’s Galaxy Tab and Research In Motion’s PlayBook running on its BlackBerry Tablet OS, will reach 150 million in 2015. Other devices that are also tracked in the research include clamshell notebooks and other convertible form factors.

“This huge growth in shipments will be dominated by tablet-style technologies such as the iPad and will mainly be driven by consumers buying devices to complement their smartphones,” Tony Cripps, principal analyst at Ovum, noted in the report. He added that these portable Internet devices will act either as a “third device” in markets where there is a high penetration of PCs, or as the primary computing device in low PC penetration markets.

Cripps added that Asia-Pacific will see a “staggering growth” in device shipments in 2015, accounting for 35 percent of global shipments, up from 20 percent in 2010. By 2015, the region will ship 52 million portable Internet devices, up from just 2.8 million last year.

Regardless of its increasing popularity, though, portable Internet devices will not replace smartphones, Cripps noted. Because smartphones have “greater ease of use” for the majority of consumers, he explained that shipments of tablets and other lite OS-based devices will not “dramatically erode” the growing demand for smartphones.

“This is especially pertinent given both device categories’ obvious similarities in hardware and software technologies,” he said.

Google to topple Apple’s dominance
In terms of platform market share, within the portable Internet device category, Ovum expects Google-based OSes Android and Chrome will dominate the segment and push Apple’s iOS down to second place.

Cripps pointed out that while the iOS platform took 90 percent of the market in 2010, this will change in five years’ time. Apple’s market share is projected to drop to 35 percent while Google’s share will rise to 36 percent. He added that other software platforms such as the BlackBerry Tablet OS and Hewlett-Packard’s WebOS, will find some success but, together, will account for the remaining 29 percent of the market.

Explaining his prediction, the analyst said: “This is because the dominant software platforms, Apple and Google, will attract the most attention from the cream of the developers.

“As a result, they will have the best, most talked about applications and content, and this is what people will consider when making a purchase,” Cripps said.

In an earlier report, however, analysts told ZDNet Asia that device functionality and form factor–rather than apps–will sway consumers’ decision to purchase portable Internet devices.

Group promotes new flash memory card format

Those who lived through the days of xD card vs. Memory Stick vs. CompactFlash vs. Secure Digital may think people need a new flash memory card format like we need a hole in our heads. Who, after all, has a burning desire to upgrade the 9-in-1 flash card reader to a 10-in-1 model?

An established industry standards group, JEDEC, has a new format it hopes will catch on, though.

The group already took over standardization of the MultiMediaCard specification that’s chiefly relevant today hidden away inaccessibly in its embedded form, EMMC, that’s used under the covers of various devices.

At the CES show, JEDEC members worked to build industry support for a faster successor called Universal Flash Storage (UFS). This specification “has been designed to be the most advanced specification for flash memory-based storage in mobile devices such as smart phones and tablet computers”, the group said, adding that it expects to publish a specification for it in the first quarter of 2011.

UFS is hitting the ground running, too, with some major allies promoting, endorsing, and using the technology.

Memory chipmaker Micron Technology gushed at the “revolutionary improvement” and pledged to support it for phone designs. Phone maker Nokia praised it as an “essential open standard”. Mobile-phone chipmaker Qualcomm pledged to support it, memory powerhouse Samsung will ship products using it, and Toshiba praised its balance of high performance and lower power consumption.

So what’s it got going for it? First, UFS recycles the well-supported SATA interface used to connect hard drives to attach hard drives and solid-state flash drives to computers, giving a major speed boost over its MMC predecessors. Initially, it’s designed to transfer data at rates of 300 megabytes per second–triple that of EMMC–and the group plans to double that with a later improvement.

Second, it’s designed to be easy on the batteries. “UFS will offer the promise for significant reductions in device power consumption due to a low active power level and a near-zero idle power level,” JEDEC said. In other words, it doesn’t suck the juice out of your battery when your phone isn’t being used.

Sounds great. There’s just one problem: SD.

The Secure Digital flash card format is very widely used, with SD slots showing up in everything from cameras to laptops to tablets and cards available at countless retail outlets. And SD has a healthy road map, reaching very large capacities of 2 terabytes in its SDXC incarnation and set to reach data transfer speeds of 300MBps next year with its Ultra High Speed II (UHS-II) interface finalized last week.

But futures are hard to predict. JEDEC took over the UFS standardization in 2007 from its previous manager, the MultiMedia Card Association. JEDEC said: “At the time when the evaluation for UFS was done it was noted that the SD standard was popular, but it was also reaching the end of the road with the version available for designs. Therefore there were two options; of which first was to continue using mass memory architecture based on memory card and improve it or do a new architecture, which meets all mass memory needs in the mobile environment.”

SD backers, though, are confident in their technology.

“The market and consumers have coalesced around the proven and easy-to-use SD standard,” SD Association spokesman Kevin Schader said. “The SD Association’s commitment to innovation of new specifications will keep it well positioned to meet future market needs and be the common interface for memory cards, embedded, and I/O [input-output].”

JEDEC believes UFS has utility SD is missing. First on the list is its availability in an embedded form–and indeed that’s likely to be a strong selling point. Another is use of the SATA standard, which eases design difficulties and enables features such as “command queuing” that can make multiple requests to read and write data more efficient. Last is power efficiency.

UFS interfaces “are designed from the ground up to be power efficient for mobile applications and enable efficient transition between the active and power save modes”, JEDEC said, and the mobile device’s processor doesn’t need to be involved much overseeing UFS.

JEDEC explicitly is defining UFS as an external card technology as well as one that’s embedded. But Michael Yang, an iSuppli analyst, believes the embedded angle is the only place to bet on the technology for now.

“UFS is first and foremost the next-generation EMMC. And that is an embedded product,” Yang said.

And Christopher Chute, an IDC analyst, said UFS isn’t likely to threaten SD’s near lock on the camera market. “Given that most of these vendors are referencing tablets and mobile devices, i.e. phones, I would tend to think that the camera market is more of a secondary concern, especially as the camera market is viewed as a mature entity with limited growth potential,” he said.

Whatever its true ambitions, the JEDEC Solid State Technology Association has significant clout. It was founded in 1958 as the Joint Electron Device Engineering Council, itself an evolution of the Joint Electron Tube Engineering Council from 1944. Its board members come from industry powers including IBM, AMD, Intel, Micron, Texas Instruments, Nokia, Oracle, Samsung, Spansion, NXP Semiconductor, and Agilent.

To add some UFS-specific help and encouragement to the tech industry, some JEDEC members also have formed the Universal Flash Storage Association (UFSA) as well.

It seems like the group will have some success in the embedded flash memory market. But if the popularity of SD card slots is anything to judge by, don’t be surprised to see UFS stay hidden under the covers.

This article wa first published as a blog post on CNET News.

IBM, Samsung initiate new 20nm research scheme

IBM and Samsung are to collaborate on research into new semiconductor materials and manufacturing processes at the 20nm scale and beyond.

Samsung researchers will for the first time pool basic research with IBM into an assortment of 20nm semiconductor technologies including three-dimensional stacking, low-power methods and new materials, an IBM spokesman told ZDNet Asia’s sister site ZDNet UK on last Thursday.

The deal, announced last Wednesday, extends a partnership which has existed since the two companies worked together on 90nm semiconductor research, Samsung’s vice president for US foundry activities, Ana Hunter, told ZDNet UK on Thursday. The scheme will see Samsung and IBM researchers work alongside at the Albany NanoTech Complex.

Read more of “IBM and Samsung initiate new 20nm research scheme” at ZDNet UK.

Report: Future iPad, iPhone to have Qualcomm chips

Is Apple moving to a new wireless chipset supplier for the next iPad and iPhone?

An unnamed but “reliable” source was quoted by Engadget last week saying that Apple is going to ditch the current Infineon chipsets used in both devices and move to Qualcomm instead. The report seems entirely plausible.

Verizon already let it slip that it’s going to have an iPad that runs on its network. It’s very likely that will be for its CDMA network, and not LTE. The current iPad model only works on GSM networks. Apple probably doesn’t want to have to make two different iPads the way it’s currently making two different models of iPhone (one with GSM chips for AT&T et al., and one with CDMA for Verizon and perhaps other future carrier partners), so switching to a chipset that allows the device to connect to both networks would be smart. Qualcomm has that, or is going to, very soon.

It’s long been rumored Apple would eventually start shipping a dual-mode iPhone–a report that the iPhone 5 would work on GSM and CDMA networks hit back in October–so going that way with both of its flagship mobile products makes a lot of sense.

Engadget also notes that while the next iPad won’t have a USB port, it will have an SD card slot, and has some images of what it would look like.

This article was first published as a blog post on CNET News.

Start-up hopes to profit from Kindle lending

A small company called Kindle Lending Club plans to launch a beta site today or tomorrow that will let it profit from Amazon’s e-book ecosystem.

The five-person start-up has a simple business model. First, connect people who are willing to lend the electronic books to those who want to borrow them. Second, when the borrowers discover that they didn’t finish with Amazon’s 14-day lending window, offer a link to buy the e-book and share a portion of the resulting revenue through Amazon’s affiliate program.

It might not be enough to acquire Facebook, but site founder Catherine MacDonald–a 40-year-old Canadian mother of three who lives in Malta and Tunisia–believes it’ll pay the bills. “I’m anticipating that Martin (my husband) and I will be able to work on this full-time, so a full-time living for the family seems realistic,” she told ZDNet Asia’s sister site CNET News.

And it could be enough to raise Amazon’s eyebrows. It’s no Napster, but the Kindle Lending Club probably has facilitated the lending of more than 1,000 books among strangers. At scale, it holds the potential to automate free book lending on a global scale when Amazon would prefer to see an actual sale.

It’s an interesting concept, one that’s spun up rapidly since Amazon launched Kindle lending on December 30. MacDonald started with a Facebook group, quickly concluded that wouldn’t accommodate the interest, raised an angel investment commitment of US$12,500, signed up two Web developers, and is launching a site–all within two weeks.

“Last Thursday, Dec. 30, I heard about the introduction of lending (I missed the October announcement) and I was thrilled,” said MacDonald, who’s worked in Web development and search marketing since 1998. “While my husband and I were going to sleep that night, an idea suddenly occurred to me, and I told him, ‘Martin, you have to remind me to start a Facebook page in the morning to get people together to lend each other books!’ So, that’s what I did, and it just took on a life of its own.”

Time was of the essence, too, since others had the same idea, she said. “It became apparent really fast that we had to move decisively and do social media and software development in tandem,” she said. Another social media angle: The site will broadcast lending possibilities and desires through the KLCfeed on Twitter.

She estimates that the Facebook site has facilitated more than a thousand loans. “It seems that most of the book loans on offer are snapped within a day of being posted,” she said.

Amazon didn’t respond to a request for comment. It can’t have been a complete surprise, though, to a global-scale Internet-company. If nothing else, Barnes & Noble beat Amazon to market with a sharing option on its rival Nook e-reader system, and that option has spawned Nook book-sharing sites.

The existence of the Kindle Lending site sheds a revealing light on Amazon’s move to add a lending option.

E-book limits
From a customer point of view, one of the big drawbacks of e-books compared to physical books is that digital rights management (DRM) technology, including encryption, typically restricts a person’s ability to lend or resell a book. If you buy a Kindle or Nook book, it doesn’t become the sort of communal family property a physical book might. And of course systems such as Google Books, Amazon Kindle, and Barnes & Noble Nook aren’t compatible.

Even though a physical book can be physically copied, it’s a pain, and the results aren’t likely to match the original. But digital content is famously easy to copy. That makes it tough for a company such as Amazon to strike the right balance between a totally locked down Kindle ecosystem and one that’s got some measure of the freedoms of physical books.

Amazon’s 14-day lending constraint, along with a limit of one lending per book and the fact that publishers don’t make all books available for lending in the first place, puts a pretty significant brake on those freedoms while still permitting a person trying to infect a friend with enthusiasm for the latest good read. But the Kindle Lending Club shows that there’s a big appetite for free books and a corresponding urge that people have to share.

“I have seen people who have said that they will save their loans for friends and family, but the number of lenders who are just entirely altruistic has really impressed me,” MacDonald said. “We have seen it in action over hundreds of loans already, so I think it’s reasonable to imagine that people will continue to be altruistic.”

MacDonald wants to keep money out of the core lending activity, too.

“I do not want to associate money or even credits with book lending on our platform,” she said. “I like the idea that someone who does not have access to a credit card, for whatever reason, can still borrow a book from someone–I could imagine someone in a developing country borrowing a book on business start-ups from someone in America. We enable people to do something simple: just lending a book like we’ve all been doing for years; but the scale and reach now makes this action potentially transformational on a global level. That gives me a great feeling when I lend an e-book, and I trust that the majority of our community members will feel the same.”

Publishers might not get a warm feeling of happiness pondering the possibility of free exchanges of their books. But one factor that doubtless weighed into Amazon’s calculations is how often lending actually hurts sales directly. It’s not clear how often book borrowing supplants book purchasing, but it’s not hard to imagine people might read a free book that they wouldn’t pay for.

Bear in mind also that the ease of copying isn’t just a threat to publishers. It also drastically lowers their production costs, giving them an incentive to embrace the e-book revolution as long as it’s not Napsterized.

And even if 100 percent of the lending replaced actual Kindle e-book book sales, the idea still might be good for Amazon in the big picture. Here’s why.

Expanding ecosystem
Kindle is an ecosystem. Amazon sells Kindle e-readers as well as books, and some number of freely available Kindle books makes a Kindle more valuable. And of course, once somebody has bought a Kindle, they’re more likely to buy future e-books through Amazon.

Even if a person doesn’t buy a Kindle reader, using Amazon’s free Kindle apps for tablets, phones, and computers instead, that’s another customer in the ecosystem. The more books in a person’s Kindle library, the less likely that person is to jump ship for a Nook–and probably the more likely that person is to purchase or upgrade a Kindle reader.

“In our view, as the Kindle ecosystem expands, Kindle device users will not only continue buying more e-books but also subscriptions, accessories, hardware warranties, and eventually use Kindle’s wireless and computing capabilities for other data and content consumption (e.g. pictures, music, videos, e-mail, etc.),” said Sandeep Aggarwal, an analyst with Caris & Company, in a Kindle report today.

Last, don’t forget that the site is funded by sales of Amazon products, and a lot of Kindle customers will be using her site.

“I borrowed [Jonathan] Franzen’s ‘Freedom’ on Dec. 30,” she said. “I know I’m not going to get it finished, so I’ll have to purchase a copy.”

This article was first published as a blog post on CNET News.

Aus floods take out first data center

The Queensland floods have claimed their first data center victim, with telco AAPT’s facility at 167 Eagle St in Brisbane confirmed to have powered down. A number of other facilities may be about to follow, as the statewide disaster continues to trouble technology providers.

AAPT this morning distributed a notice to customers stating that the 167 Eagle St facility had gone offline. “Due to the flooding of the Brisbane region, AAPT will power down the equipment at the 167 Eagle St, Brisbane site as a safety requirement,” the telco said in a statement. Sources said that the telco’s other facilities at 344 Queen St and up the road at 123 Eagle St were also expected to go down shortly.

AAPT spokespeople this morning were unable to be contacted on the matter, and technicians at AAPT’s network operations centre declined to comment, saying they weren’t authorised to do so. In its statement, AAPT said it was currently investigating the issue and would provide further information once it became available, apologising for the inconvenience caused.

It is unclear how large and how critical the AAPT facilities are to the running of the state’s telecommunications systems, although the 167 Eagle St facility is believed to be a major one, in the heart of Brisbane’s financial and legal district. And AAPT may not be the only company to suffer problems with its datacentres in the wake of the floods hitting the state capital. Pipe Networks may also shortly be facing power shortages at some of its Brisbane facilities.

The company has sent out a string of notes to clients this morning. At first it noted that it did not expect any problems, but later operations manager Matt Whitlock noted in an email that emergency services agencies and energy utility Energex had advised the company that it may be necessary to disconnect its 127 Creek St facility from grid power.

“Currently, the concern is regarding the substation located in the lower basement of the building,” wrote Whitlock. He noted that if power was cut to the facility, Pipe’s UPS [uninterruptible power supply] systems and generators would carry on delivering power to its DC1 and DC2 facilities, with its DC3 and DC4 facilities continuing to run on mains power.

“We have confirmed that there is sufficient fuel to operate the building for at least 24 hours,” he added.

However, later in the morning, Whitlock noted the situation had changed, and Pipe had been advised that its DC1 and DC2 facilities at 127 Creek St would be “one of the last buildings to be disconnected from the grid by Energex”, as it housed a critical Queensland government department coordinating the State Emergency Service response to the flood.

“Energex have advised that if the flooding reaches 15 to 20cm of standing water in the lower basement car park of 127 Creek St, all power (including the generators) will be cut to the building,” wrote Whitlock. “This will result in DC1 and 2 going dark until such time as Energex advise us that power can be safely restored to the building.” DC3 and DC4 won’t be affected, however.

And this could be a problem for Pipe, given the company’s previously mentioned 24-hour time frame.

“Worst-case scenarios puts this time at 48 hours,” said Whitlock of the potential outage from the grid power system. Pipe has now evacuated the 127 Creek St office, including its network operations centre, although it continues to monitor its network remotely. “As I’m sure you can understand, we are working in a very changeable climate and trying to react to the changes in advice,” wrote Whitlock.

Not everyone’s coming so close to the wire. Melbourne IT spokesperson Tony Smith said his company’s datacentre was in Wickham St in Fortitude Valley, on the edge of the central business district. It currently had full power from mains supply, and obviously generators for backup, he said.

“We’re going to keep monitoring the situation, and trying to get in touch with Energex, to see what their plans are. We’ll essentially be ready,” Smith said.

This article was first published at ZDNet Australia.

Globalfoundries to ride on mobile wave

SINGAPORE–Tapping on the growth of consumer electronic devices, Globalfoundries is ramping up its microelectromechanical systems (Mems) production and has set its sight on becoming worldwide leader in this area within the next four years, says a company executive.

In a Tuesday media briefing, Raj Kumar, general manager of Globalfoundries Singapore, said the AMD spinoff is targeting to become the global No. 1 Mems foundry by 2015. According to him, this market will see high growth, driven by high-volume consumer electronics such as mobile phones, laptops, tablets and cameras.

Globalfoundries’ facilities and tools for Mems production are ready and the company will begin manufacturing in mid-2011, said Kumar. To gear for this new direction, the Singapore Globalfoundries campus brought in Mems experts last year, he added.

In the past, production of Mems has been focused on 6-inch wafers and the market has been mainly captured by integrated device manufacturers (IDMs), said Kumar.

The market, he also noted, was fragmented and there was a lack of standardization in manufacturing processes for Mems. This gave rise to cost inefficiencies, as foundries needed to invest additional capital expenditure even when bringing in customers from within the same sector, he said.

However, Kumar believes that the market is changing and Mems production volumes have become significant enough to achieve economies of scale. He also noted that the Mems market will eventually turn to pure-play foundries as customers would prefer vendors who can offer integrated solutions including Mems, CMOS (complementary metal-oxide semiconductor) and wafers.

The Mems market is one of Globalfoundries’ key focus areas for 2011. The company announced that it will be investing US$5.4 billion in capital expenditure in 2011, nearly double that in 2010.

Globalfoundries-Chartered marriage ‘very successful’
Touching on the merger of Globalfoundries and Singapore’s Chartered Semiconductor Manufacturing, which was finalized in December 2009, Kumar noted that the integration had been “very successful”.

According to him, the Singapore campus plays a critical role for the merged entity as it has the largest facilities, resources and personnel. Some 200 employees from the island-state were also involved in supporting fab expansion in Dresden, Germany and New York.

Kumar also noted that Singapore contributed more than US$2 billion in revenues for the company. Globalfoundries’ total 2010 revenue was estimated at about US$3.5 billion.

Intel, Nvidia make ‘patent peace’

Intel said Monday that it will pay Nvidia US$1.5 billion over the next five years to settle all legal disputes. The two companies have also entered into a cross-licensing patent deal.

The chip giant said the settlement “preserves patent peace” between the companies, according to a statement.

Other key details of the agreement are:

  • Intel gets a license for Nvidia’s patents and vice versa;
  • Intel and Nvidia have released all legal claims;

Read more of “Intel, Nvidia make ‘patent peace,’ settle legal disputes” at ZDNet.

AMD CEO resigns; search on for new leader

AMD CEO Dirk Meyer will step down after reaching an agreement with the company’s board over his departure, AMD said today.

Thomas Siefert, AMD’s CFO, will fill Meyer’s spot on a temporary basis as the company searches for a new CEO. It does not seem like the decision was entirely Meyer’s.

In a press statement Monday, AMD said: “…the board believes we have the opportunity to create increased shareholder value over time. This will require the company to have significant growth, establish market leadership and generate superior financial returns.

“We believe a change in leadership at this time will accelerate the company’s ability to accomplish these objectives.”

Meyer had been with AMD since 1995, holding a variety of prominent engineering roles before becoming the man-in-waiting to succeed Hector Ruiz at the top spot, which he did in July 2008. During his tenure as CEO, AMD regained its financial footing to a certain degree, helped out by the settlement of its antitrust lawsuit against Intel for US$1.25 billion in November 2009.

His departure comes as a bit of a surprise to the chip industry, judging by comments on Twitter from people like Microsoft’s Rahul Sood, who worked closely with AMD for years developing gaming PCs for his Voodoo PC and later Hewlett-Packard, which acquired Sood’s company. “woah…Dirk Meyer resigned from @amd. that was completely and totally unexpected,” he wrote.

AMD also announced preliminary revenue results for its fourth quarter, ahead of next week’s expected announcement of its full financial results. Revenue will be US$1.65 billion, slightly ahead of what analysts were expecting for the quarter.

APAC to lead tablet revenues by 2014

The Asia-Pacific region will dominate global tablet revenues by 2014, predicted an analyst firm, which called the growth of the device category “unprecedented”.

In a Wednesday forecast report on the worldwide tablet industry, Yankee Group noted that global tablet revenues are expected to increase from US$16 billion in 2010 to US$46 billion in 2014. Yankee Group analyst Dmitriy Molchanov described the growth of tablets as “unprecedented”, adding that tablet sales are rising faster than that of HDTVs, handheld gaming consoles or MP3 players.

The Asia-Pacific region, particularly China, will account for 58 percent of the global market revenues three years from now, said the firm. According to the report, the region’s rise will overshadow current market leader, North America, which will see its share drop from 37 percent in 2010 to 17 percent by 2014.

The same report noted that in the United States, tablet sales will reach 30 million units by 2015 compared to last year’s 8 million units, representing a compound annual growth rate of 31 percent during the five-year period.

The average selling price of tablets in the United States, added Yankee Group, will also halve to US$237 by 2015 due to reference models, open source operating systems and economies of scale in touch-screen manufacturing.

In a previous report, analyst firm ABI Research noted that white box tablets–devices whose brands have yet to become as famous the Apple iPad or the Samsung Galaxy Tab–is thriving in Asia. The company also singled out China as one of the market leaders in this low-cost tablet segment.

Microsoft details ‘transparent’ data center

Microsoft has given details on a new data center it is building that is designed to maximize the use of free air cooling.

The data center, to be located in Quincy, Washington, has a structure that is built out of multiple, modular pre-assembled components (PACs), Microsoft said Wednesday.

“The structure is virtually transparent to ambient outdoor conditions allowing us to essentially place our servers and storage outside in the cool air while still protecting it from the elements”, Microsoft‘s general manager for datacenter services, Kevin Timmons, wrote in a blog post. “Our modular approach to design and construction with these facilities will allow us to substantially lower cost per megawatt to build and run our data centers“.

Read more of “Microsoft details ‘transparent’ data center” at ZDNet UK.

Triple-speed SD card standard finalized

The SD Association announced a new interface for flash memory cards Thursday that triples data transfer speeds.

The faster SD card specification was expected since the group started previewing it in September. But more unusually for the consortium, the SD Association also announced an e-book specification at the Consumer Electronics Show in Las Vegas.

“Our new e-Book application…opens broad consumer access to e-book content, and turns billions of existing SD mobile phones and devices into e-readers,” Norm Frentz, chairman of the SD Association, said in a statement. “SD continues to evolve its capabilities to support voracious consumer demand for portable movies, television broadcasts, high-definition home videos, and now full-color books.”

It’s not yet clear who among e-book reader makers, publishers, or other companies are on board with the new specification, but two partners showing eBook support at CES are Toshiba and Sharp, the association said. Such partnerships will be important to its success, though, and there already are other e-book formats, such as ePub.

But eBook won’t live in isolation. “The association plans to support popular external formats like ePublish, CPS, XMDF and “.book” formats in the near future,” said SD Association communications director Kevin Schader. And to keep content publishers happy, it’s free to use and supports copy protection.

“Just like SD-Video, SD-Audio and SD-Binding, the SD eBook allows consumers to view electronic books supporting SD’s format on a multitude of SD products while preserving copyright protection for publishers,” Schader said.

The group’s core work is with SD itself, though. The format has largely extinguished two rivals, xD Card from Fujifilm and Olympus, and Memory Stick from Sony, though CompactFlash retains clout in a high-end niche.

SD cards are growing in maturity, with Canon supporting them in its top-end SLR and offering dual SD slots in its new Vixia HF G10 high-end videocamera. And Lexar announced 64GB and 128GB professional-grade SD cards, taking advantage of the new capacity of the SDXC standard. But even those newly announced and not-yet-available cards are relatively slow, when it comes to transferring data–just 20MBps.

To speed things up, SD developed the Ultra High Speed (UHS) communication technology for SD cards–either the older SDHC variety or the newer SDXC models, with much higher data capacity. The first generation, UHS-I, reaches 104MBps.

The new UHS-II technology, though, adds a second row of electrical contacts and boosts data transfer speeds to 312MBps. And there’s more to come.

“We’ve tripled bus interface speeds from last year’s UHS-I development, and we plan to double UHS-II speeds in the future,” Frentz said.

Devices supporting the UHS-II technology will also be able to read older SD cards, the SD Association said.

In September, the group said UHS-II cards and devices using them would become available in 2012.

This article was first published as a blog post on CNET News.

Freescale unveils quad-core mobile processor

Freescale has introduced a quad-core application processor that can be used to deliver full-HD content on smartphones and tablets.

The i.MX 6Quad processor, unveiled on Monday, is at the top end of Freescale’s new i.MX 6 range of processors, which also includes the single-core i.MX 6Solo and the dual-core i.MX 6Dual. The processors in the range, all based on ARM Cortex-A9 cores running at up to 1.2GHz each, are designed for use in smartphones, tablets, in-car entertainment systems and e-readers.

The new processors will make it possible for mobile devices to feature “3D video playback, desktop-quality gaming, augmented reality applications and content creation capabilities”, Freescale said in a statement. The company added that the chips will be able to support full 1080p high-definition video at up to 60 frames per second.

Read more of “Freescale unveils quad-core mobile processor” at ZDNet UK.

As processor recedes from view, AMD stands to benefit

LAS VEGAS–AMD on Tuesday unveiled its Fusion platform, a new class of processor that the company is pretty excited about.

AMD says Fusion “combines more compute capabilities than any processor in the history of computing”, a chest thump for sure, but backed by a formidable family of accelerated processing units, or APUs, that combine in a single die design multi-core x86 CPU tech and a DirectX 11-capable discrete-quality graphics and parallel processing engine.

To the average Joe, that’s a lot of technical gobbledegook. But if you know nothing, know this: AMD is working to display all of its competencies in one product, heating up its rivalry with Intel considerably.

Read more of “CES: As processor recedes from view, AMD stands to benefit” at ZDNet.

Dell to acquire SecureWorks

Dell on Tuesday beefed up its security efforts with the acquisition of SecureWorks, a company that provides information-security services.

Terms of the deal weren’t disclosed.

With the acquisition, Dell said in a statement that it would use SecureWorks security as a service applications–managed security, risk consulting and threat intelligence–to bolster its software line-up. SecureWorks provides security information management, log monitoring, intrusion prevention, vulnerability scanning and other services.

Read more of “Dell acquires SecureWorks” at ZDNet.

Intel Sandy Bridge to debut at CES

Intel has revealed details of its new range of mainstream processors, codenamed Sandy Bridge, in advance of their expected debut at the Consumer Electronics Show.

The 32nm Sandy Bridge processors will come in three variants–i3, i5 and i7– across 29 separate processors, all with fully integrated on-die graphics. The processors are expected to go into devices offered by all the main computer manufacturers. Sandy Bridge will be launched at the Consumer Electronics Show (CES) in Las Vegas.

Sandy Bridge will be 42 percent faster at content creation and 50 percent faster at gaming than previous generations of Intel chips, according to a report by ZDNet Asia’s sister site CNET News.

Read more of “Intel Sandy Bridge to debut at CES” at ZDNet UK.

Nvidia unveils site for 3D video, photos, sports

Graphics chipmaker Nvidia, eager to hasten the arrival of the 3D graphics era and spur demand for new 3D hardware, today a site for content called 3DVisionLive.

At the site, people can share their own 3D photos and see more from professional photographers; watch short videos, trailers, and sports; and rate the content they see. The site supports Nvidia’s 3D Vision technology and old-school anaglyph technology with the blue and red glasses.

3D is a theme at CES this year–and not for the first time. Moving the industry is a massive undertaking that involves content creation, content distribution, and any number of hardware support and compatibility issues.

“The goal of is to create an online community where users can experience the best applications and content for 3D PCs,” said Phil Eisler, general manager of 3D Vision, in a statement. “Now photo and video professionals and enthusiasts will see the future of their profession or passion in 3D with an easy-to-use Web site.”

A quick glance at the site reveals some imagery that one might expect to appeal to the stereotypical gaming nerd who pays for premium graphics technology–photos of scantily clad women and stills from various video games. There also are plenty of landscape and other subjects with potentially broader appeal.

Videos cover sporting subjects such as surfing, mountain biking, flying, and racing. Here, too, video game content and “Bikini Carwash” duke it out with nature documentaries for setting the tone.

Nvidia announced the site at the Consumer Electronics Show, taking place this week in Las Vegas.

Also at the show, Nvidia will demonstrate several new PCs and displays with 3D Vision.

One will be the Asus All-in-One PC ET2400XVT, available now for sale online. It has a 23.6-inch, 1920 x 1080, multitouch display, a Blu-ray drive, and an Nvidia GeForce GTX 460M GPU.

This article was first published as a blog post on CNET News.

Standard smartphone charger gets tech specs

Two European standardization bodies have agreed on the technical standards for a pan-European smartphone charger.

On Wednesday, the European Commission announced that European standardization bodies had published a set of harmonized standards for chargers for data-enabled mobile phones.

“I am very happy that the European standardization bodies have met our request to develop within a short space of time the technical standards necessary for a common mobile phone charger based on the work done by the industry,” the European Commission’s vice-president for industry and entrepreneurship, Antonio Tajani, said in a statement accompanying the announcement. “The common charger will make life easier for consumers, reduce waste and benefit businesses. It is a true win-win situation.”

Read more of “Standard smartphone charger gets tech specs” at ZDNet UK.

Intel launches ultra-small SSD range

Intel has a new range of solid-state drives (SSDs) that are one-eighth the size of its mainstream 2.5-inch X25 range.

The new Intel SSD 310 Series is designed for a variety of form factors, including dual-drive notebooks, single-drive tablets and low-power embedded applications, the company announced alongside the release of the drives on Wednesday.

Lenovo appears to be keen on the drives. “The Intel SSD 310 series will allow us to provide the advantages of a full performance Intel SSD paired with the storage of a hard-disk drive in a small, dual-drive system,” Lenovo’s director of ThinkPad product marketing, Tom Butler, said in a statement.

Read more of “Intel launches ultra-small SSD range” at ZDNet UK.

Reports: Nintendo warns of 3DS risk for kids

Nintendo has reportedly issued a warning that the 3DS, its eagerly awaited glasses-free 3D portable gaming device, should not be used by children under 6 when the gadget is in 3D-viewing mode.

According to PC World and other media outlets, an advisory posted on Nintendo’s Japanese-language Web site notes that the eyes of children under 6 have not yet fully developed and that 3D viewing on the 3DS could disrupt that development. The company recommends that adults protect young players by way of parental controls on the 3DS that allow for the blocking of the 3D function while leaving 2D play accessible. (Here is the site in English via Google Translate.)

The advisory reportedly also suggests that older players take a break after 30 minutes of 3D viewing on the device–as opposed to a break after an hour of 2D play–and says players should discontinue 3D viewing if they begin to feel ill.

In May, Nintendo CEO Satoru Iwata told the Associated Press that health concerns related to “children’s eyesight” were a key factor in the decision to make a 2D mode available on the 3DS.

Nintendo first announced the gadget in March. It later said the 3DS would be made available in the U.S. and Europe in March 2011. The GameStop chain of stores announced yesterday that it is taking preorders on the potentially revolutionary device, which will be made available for scrutiny by the general public for the first time in January, at Nintendo World 2011 in Japan. PC World reports that children under 6 will not be allowed to use the device at that event.

This article is first published as a blog post on CNET News.

Could Apple ship 65 million iPads next year?

Some of the companies that manufacture parts for Apple’s iPad are anticipating the company may ship 65 million of the tablet devices in 2011, according to an article in DigiTimes on Wednesday.

That number far outstrips current market estimates of about 45 million. As recently as this past summer, 25 million iPads in a year was considered a staggering number.

The estimates come via LG Display and Samsung, two of the companies that Apple has enlisted to build the display technology for the iPad. Looking at the 65 million figure as well as the fact that LG shipped 1.5 million iPad panels in November and Samsung shipped 1.2 million that month, DigiTimes assessed that this reflects not just Apple’s optimism about the growing popularity of tablets but also potentially the sense that Apple may be “overbooking” its orders of panels.

The iPad debuted in April. Analysts have guessed that Apple’s total 2010 iPad sales will turn out to be around 10 million, outpacing sales of the original iPhone.

DigiTimes, which is based in Taiwan, has been keeping a close eye on iPad parts manufacturers of late, primarily because of the likelihood that details may emerge about the technical specifics of a rumored second-generation iPad that may be released before spring.

This article was first published as a blog post on CNET News.

Red Hat goes after Windows server market share

Red Hat executives say they are going after Windows workloads in the enterprise and winning their share of deals. However, the effort will take time and the battle is really over new computing workloads.

The Red Hat Enterprise Linux-Windows Server duel is worth noting. According to IDC’s most recent data, Windows servers have 47.7 percent of the market with third quarter revenue of US$5.6 billion, up 26 percent from a year ago. Linux servers represent 17.5 percent of industry revenue and third quarter revenue grew 32.6 percent to US$2.1 billion. Unix server revenue has 21.5 percent market share, but is fading. IBM’s z/OS has 8.6 percent of the server market.

In a nutshell, Windows servers have the most market share and nice growth. It’s just a matter of time before Linux servers eclipse Unix to become No. 2.

Read more of “Red Hat vs. Windows for server share: The battle just heating up” at ZDNet.

iPad 2 design rumored to bring ergonomic tweaks

The next major version of the iPad is said to bring some slight design changes that could impact how users interact with the device both in their hands and on flat surfaces.

AppleInsider links to Japanese Mac blog MacOtakara, which is reporting that the next version of the iPad is getting a flat back to match that of the most recent iPod Touch, as well as a slight change in dimensions, cutting a reported 3mm off the length and width while retaining an identically sized screen.

In other words, the next iPad could have a smaller bezel–the black area around the screen, and it won’t teeter-totter or slide around when you press on something along the edges.

MacOtakara says a more substantial change to the exterior will be the location of the speaker, which could be moved from the side of the unit to the back. Presumably, this could keep someone who is holding the device in either portrait or landscape mode less of a chance of blocking the speaker holes. MacOtakara also says this speaker would be wide range, which could offer more evenly distributed audio at off-angle viewing.

One other small tweak MacOtakara is reporting is a change in the location to the iPad’s ambient light sensor, which is moving from the front of the unit to the back. This would be a fairly large departure in location given where Apple keeps it on the current iPad, as well as on iPhones, iPods, iMacs, and its MacBook Pro and Air lines.

MacOtakara also weighs in on the longstanding rumor that the next iPad will gain dual cameras and support for Apple’s FaceTime video chat service, saying only that it’s a possibility.

These small tidbits join a slew of other rumored second-generation iPad details including dual support for GSM and CDMA, cameras that match the ones found in the iPhone 4, availability in time for Christmas (we can go ahead and cross that one of the list).

In addition, an analyst report from this morning says the yet-to-be-announced device will be packing a dual-core processor.

This article was first published as a blog post on CNET News.

Sony reportedly buying back Toshiba’s chip factory

Consumer electronics maker, Sony, is reportedly planning to buy a chip manufacturing factory it had sold to Toshiba in 2008, as part of the company’s efforts to increase its chip production for use in its mobile phones and cameras.

According to a report Thursday from Reuters, “a source close to the deal” said Sony is in discussions with Toshiba to purchase a chip manufacturing production line in Japan’s Nagasaki prefecture. Estimated to be worth 50 billion yen (US$595 million), the deal is expected to boost Sony’s supply of image sensors for mobile phones and digital cameras.

The report also noted that Sony executive deputy president, Hiroshi Yoshioka, said in a previous interview that the company was looking at ways to plug a shortage in CMOS (complementary metal-oxide semiconductor) sensor output capacity.

However, a Bloomberg report noted that Sony had denied making any announcement regarding the purchase in a statement to the Tokyo Stock Exchange.

According to Bloomberg, which quoted the Nikkei newspaper, purchase of the Toshiba facility will double Sony’s monthly production of the sensors from about 20,000 to 40,000 units.

Sony had sold the plant to Toshiba in 2008 for US$835 million.

A Dec. 3 report from Gartner ranked Toshiba as the world’s third-largest semiconductor vendor, after Intel and Samsung. A separate report from the research firm points to a sustained, but slow growth for the semiconductor industry in 2011, where smartphones, mobile PCs and tablets will spur market growth through 2014.

BT fire knocks out card payments in central London

Retailers were unable to take card payments from Christmas shoppers in central London on Tuesday, after a fire in a British Telecom (BT) exchange knocked out card-reader services.

A water leak caused an electrical short circuit, leading to a localised fire in a BT exchange in Gerrard Street, BT told ZDNet Asia’s sister site ZDNet UK.

“BT can confirm that water damage from a mains drain has disrupted power supplies to an exchange in the west end of London,” the company said in a statement on Tuesday. “A number of customers in central London have been experiencing a loss of service.”

Read more of “BT fire knocks out card payments in central London” at ZDNet UK.

Apple TV to hit 1 million units

Apple said it expects to sell more than 1 million new Apple TV units this week in a move that is timed perfectly to mock Google TV.

Steve Jobs’ “hobby” is a US$99 box that brings iTunes, Netflix, YouTube, Flickr and MobileMe to an HDTV. The first Apple TV didn’t sell so well. Jobs took those lessons, simplified and made some headway.

But more importantly for Apple’s announcement is the timing. Apple is almost taunting Google with 1 million units of Apple TV even as connected Google TV sets aren’t selling all that well. Best Buy has said 3DTV and Internet-connected TV hasn’t lived up to industry expectations. Meanwhile, Google seems to be slowing its Google TV reviews over mixed reviews. Google TV won’t be making a huge splash at the upcoming Consumer Electronics Show.

Read more of “Apple gives Google TV a raspberry: Apple TV to hit 1 million units” at ZDNet.

Is the PalmPad a recycled HP Slate?

A new report says that Hewlett-Packard(HP) will show its WebOS tablet at CES next month, called the PalmPad.

HP has been talking about the PalmPad almost since the company bought Palm and its WebOS operating system (OS) in the spring, though the company has repeatedly said the device won’t actually be shipped until the end of the first quarter in 2011.

But a Fox News story on Tuesday has some very curious details. The Fox reporter’s source forwarded him a diagram that is purported to be the forthcoming PalmPad. It has few labels except for a note about an optional PalmPad dock. The report says HP will introduce not one, but three slightly different models of the WebOS-based tablet, and that “they’re collectively a spin-off of the never-released HP Slate“.

That got us thinking, so we looked back at our own story about the HP Slate 500–which was announced by HP in late October with a price tag of US$799. We realized that the PalmPad diagram in Fox’s report is the same as HP’s Slate 500 diagram in our earlier report, except for all the labels missing in the PalmPad diagram save for the dock, whose label has been changed from “Optional HP Slate 500 dock” to “Optional palmPad dock”.

There are several possible conclusions here: Fox’s source misrepresented the diagram and details–it’s very odd that they would say the HP Slate was never released when the HP Slate 500 was introduced exactly two months ago. Or they mean a different HP Slate. Or perhaps HP recycles general diagrams for internal purposes. On the other hand, there is some possibility HP is repurposing the HP Slate hardware for the PalmPad running, according to Fox, WebOS 2.5.1.

But would HP actually use the same hardware running a full-blown desktop OS meant to target business users, and instead slap the lightweight WebOS on it and try to sell it to the same people who are considering an iPad or Galaxy Tab?

We’ve reached out to HP to see if someone over there can clear this up.

This article was first published as a blog post on CNET News.

Report: Microsoft bringing Windows to ARM chips

At CES next month, Microsoft will reportedly unveil a full-featured version of Windows that runs on ARM processors–a big departure from the x86 architecture.

Bloomberg, which broke the news today, reported that sources familiar with Microsoft’s plans said this version of Windows will continue to work on x86 processors, but that it should improve battery performance on devices like tablets and other devices that use ARM processors. Additional confirmation of Microsoft’s plans came from The Wall Street Journal, which added that this new version will not be available for another two years.

Microsoft declined to comment.

Microsoft already has a version of Windows called CE that runs on ARM, but it’s been designed for embedded systems. This version is also able to run on x86, Hitachi SuperH, and MIPS. Additionally, there’s a version called Windows Embedded Compact 7 that’s been built for tablets and other small devices. However, that does not quite match up feature-to-feature with a full-fledged version of the desktop OS, which this new version is said to do. Microsoft first introduced Windows EC7 as a public technology preview back in June.

ARM has remained the dominant architecture in small electronics devices like cell phones, both for its processing power and power efficiency–two things that have led to faster electronics with longer battery lives. PC makers like Dell have even dabbled with including ARM processors within PCs, as a way to provide instant-on capability for users who don’t mind using Linux to do things like check e-mail or fire up a quick Web page versus doing a full boot into Windows. Much of this was in response to some of x86’s shortcomings. Despite Intel pushing down things like power consumption, while boosting chip speed and the number of cores in product like the company’s Atom chips, battery life did not see the same kind of massive gains.

But as far as its move to traditional personal computers, ARM has not gotten there quite yet. In the last year or so there has been a big movement in that direction with products like Apple’s iPad, which utilizes an ARM processor and blurs the line between traditional computers and standalone entertainment devices–so much so that some of its features are headed to Apple’s Mac OS. There’s also Google’s Android, which runs on ARM and is in the beginnings of making its move toward the tablet form factor. Worth a mention too is the nascent Chrome OS, which is largely being built to be CPU-agnostic.

Also, despite Microsoft’s ambitions to get small and powerful tablets into the hands of users several years ago, projects have fizzled due to a combination of high prices, bulky designs, slow performance, and poor power consumption. This was especially true of a range of products dubbed the Ultramobile PC category, which ended up being the precursor to Netbooks (which now face problems of their own).

Rumors kicked up earlier this month about Microsoft previewing an early version of Windows 8 at the company’s CES keynote speech, scheduled for Jan. 5. The New York Times had also reported that Microsoft CEO Steve Ballmer would be demonstrating a Samsung-made iPad competitor with a slideout keyboard. Perhaps then, the ARM-friendly version of Windows will not just be another version of Windows 7, but the next major version of the OS instead.

This article was first published as a blog post on CNET News.

HP targets Cisco customers with trade-in promo

Hewlett-Packard on Tuesday launched its most aggressive assault on networking giant Cisco: A trade-in promotion to rip and replace existing gear.

HP‘s promotion, dubbed “A Catalyst for Change” to play off the brand name for Cisco‘s switches, is aimed at networking gear that will be nearing the end of its useful life at the end of 2011.

Under the terms of the trade-in promotion, HP will shave 20 percent off the list price of its A-Series and E-Series switches for customers who trade in Cisco equipment. The minimum deal size is US$100,000 list price. Specifically, the savings requires a trade-in of Cisco Catalyst 2960/S Series, 3560/E Series/X Series, 3750/E Series/X Series, 4500 E Series, 4900 Series or 6500 Series, as well as Cisco Nexus 5000 Series or 7000 Series switches.

Read more of “HP launches trade-in promotion to poach Cisco customers” at ZDNet.

More details about sale of Apple, Dell secrets

ZDNet Asia’s sister site CNET has obtained a copy of the FBI’s complaint against four men who had access to vital trade secrets belonging to such tech companies as Apple, Dell, and AMD, and are accused of repeatedly violating securities laws by selling this information to hedge funds, according to the FBI.

As a result of a sophisticated sting operation that involved wiretaps and recorded phone conversations, FBI agents have arrested the four men on a score of charges that include securities fraud, wire fraud, and conspiracy.

The government’s complaint, filed last week with U.S. District Court for the Southern District of New York, accuses the suspects of acquiring and selling a shocking amount of trade secrets involving Apple’s iPad, iPhone, and iPod, as well as sales figures, sales projections, and revenue data for the other companies.

The government alleges that the case centered on Primary Global Research, a company that sold consulting services to investors about the tech industry. The government accuses James Fleishman, a exec at the Mountain View, Calif.-based company, of creating a reservoir of insider information by paying three men employed at top tech firms.

Those insiders allegedly are Walter Shimoon, (Flextronics International); Mark Anthony Longoria (Advanced Micro Devices) and Manosha Karunatilaka (U.S. division of Taiwan Semiconductor Manufacturing).

The operation was simple, according to a copy of the complaint against the men. Hedge fund managers paid big bucks to Fleishman to speak with the “consultants”. According to the government’s complaint, here’s a sample of the kind of information–taken from recorded conversations–the hedge funds received for their money:

“Later in the call [from an October 1, 2009 conversation] Shimoon told [cooperating witness from a hedge fund] that Apple was going to be producing a new iPhone…that would be ‘coming out early next year’, and that the new iPhone ‘is gonna have two cameras’.

“When Shimoon told [the cooperating witness] this information, [the cooperating witness] asked when the new iPhone was coming to market. Shimoon replied: ‘I was being asked the same question by my boss this morning. Um, cause we’re working with them on the camera. They [Apple] you know, they’re very secretive, right? So I don’t have an exact time frame but I’ve concluded we’ll start building modules probably in March. Um, so you give it one to two months, April, May. So probably sometime in May, um, they’ll have a big you know big launch.’

“Later in the call Shimoon explained, it’ll be a neat phone cause it’s going to have a five megapixel autofocus camera and it will have a VGA forward facing video conferencing camera.

“Later in the call Shimoon told [the cooperating witness] about an Apple product in development ‘[Apple has] a code name for something new,’ Shimoon explained. It’s totally…it’s a new category altogether. And, uh, I speculate, it doesn’t have a camera in it, what I figured out. So I speculated that it’s probably a reader…something like that…I believe it’s called K, K48. You can get fired for saying K48…outside of a meeting that doesn’t have K48 people in it.”

It’s important to remember that the above conversation took place about eight months before the iPhone launched in June. Some of what Shimoon spoke about, was by that point being speculated about by the tech press but nothing was certain. And nothing was publicly known about K48, which was Apple’s code name for the iPad, the computing tablet Apple launched in April.

The FBI also alleges that Shimoon provided a hedge fund employee with a sales forecast for the iPhone 4.

The FBI accuses Longoria of selling out his own employer. On July 21, 2009, the FBI alleges that Longoria, 44, told a cooperating witness, who at that time worked for a hedge fund, that he worked with AMD’s processors and was privy to such information as forecasts, build plans, and original equipment manufacturers and boasted that he had “quite a bit of insight into how things are trending”.

Longoria told the hedge fund employee that demand for AMD’s products were strong and to prove it Longoria told the man he would “rattle off some numbers…because I have my report”. The FBI alleges that Longoria provided the hedge fund employee with specific sales figures for sales of desktop PCs, notebooks, servers and embedded processors to the hedge fund employee. None of the information had been made public, the FBI said in its complaint.

Longoria also gave up revenue figures, according to the FBI. He allegedly told the hedge fund employee that he thought revenue for the then upcoming quarter would be US$1.18 billion. The hedge fund employee allegedly asked if Longoria was confident in that number and Longoria responded: “Yes, I’ve got a buddy that works in finance that, uh, gives, uh, me all the nitty gritty details, probably more than I understand.”

According to the Associated Press, a U.S. magistrate judge ordered Longoria released on US$50,000 unsecured bond. Karunatilaka’s bail was set at US$250,000, and Shimoon has yet to appear before a judge. Daniel Devore, a former Dell employee, pleaded guilty December 10 to wire fraud and conspiracy charges.

The FBI showed that the defendants allegedly knew the kind of information exchange they were engaged in was unlawful. For example, Shimoon sent an e-mail in November 2009 to employees of Apple and those that worked at a specific Flextronics business unit.

“I am sending this e-mail as a gentle reminder to all of us that the [Flextronics business unit] and Apple are covered under both a nondisclosure agreement and [Master Development and Supply Agreement] This…will protect the work we have done with them up until now as well as the joint work we are doing with Apple…on process improvements for the [next generation] of iPhone.”

This article was first published as a blog post on CNET News.

Global semiconductor equipment spend to plateau in 2011

After a record 131.2 percent leap in 2010 to reach US$38.4 billion, global semiconductor equipment spending is expected to be mostly flat next year, falling by a slight 1 percent, according to a new report released Wednesday.

Klaus Rinnen, managing vice president at Gartner, said in a statement that following a solid rebound from 2009’s economic doldrums, companies should prepare for a softer 2011.

The report’s findings are in line with Gartner’s earlier forecast that worldwide semiconductor revenues will experience sustained but slower growth next year to a tune of US$314 billion.

Rinnen noted that equipment purchases in 2011 will focus more on capacity rather than technology equipment.

The analyst said NAND flash will lead the memory segment in terms of capital spending in 2011, he added. Attributing the high demand to the “phenomenal success” of media tablets, the Gartner analyst said NAND demand will continue strongly for the foreseeable future and require market players to commit continued high levels of investment in order to meet the growing demand.

Foundry spending will also be a major trend in 2011 due to fierce competition between leading chipmakers, TSMC (Taiwan Semiconductor Manufacturing Company), GlobalFoundries andSamsung, as well as a continued shift to “an asset-lite” strategy by many of the world’s integrated device manufacturers (IDMs), Rinnen said.

Massive semiconductor growth
According to the Gartner, all segments of semiconductor capital equipment market showed exceptionally strong growth rates this year, clocking between 118 percent and 140 percent.

Spending for automated test equipment (ATE) saw the strongest increase, climbing 140.5 percent from 2009 to US$2.8 billion in 2010. The ATE market had dropped to extremely low levels in 2009, with the memory test segment dipping below US$200 million.

The ATE market was able to recover substantially in 2010 during the first three quarters, but Gartner also estimated that the market will now experience a quarterly decline up to early 2011.

Spending on water fab equipment (WFE) rose to US$29.7 billion this year, a 133 percent jump from 2009, due to strong worldwide semiconductor demand and underinvestment during thebearish times of 2008 and 2009, noted the research house.

However, it predicted that WFE growth will slip by 3.4 percent in 2011 because overall fab (or fabrication plant) utilization had been on the decline recently, with more capacity coming online and slower semiconductor production to align more with end-user demand.

That said, Gartner added that the WFE market will pick up again and return to positive growth in 2012.

In the area of packaging and assembly equipment (PAE), spending grew 118.6 percent over 2009 to hit US$5.9 million in 2010.

The analyst firm also noted that Asia-Pacific’s share of PAE purchases will grow from 79 percent in 2010 to 86 percent in 2014. In particular, China will be the largest individual consumer of this segment by 2013, accounting for just over 30 percent of the total market that year.

White box tablet market ‘thriving’

Media tablet devices from brand names such as Apple, Dell and Samsung might be hogging today’s headlines, but a “thriving” white box tablet market boasting a more varied product range will likely experience robust, sustained growth rates, particularly in markets such as China, a new report highlighted.

The report, published on Wednesday by analyst firm ABI Research, said there are more than 60 different white box tablet devices from about 50 different manufacturers currently available in the market. As brand name is relatively unimportant and prices are relatively affordable in this particular market segment, as compared with branded tablets such as Apple’s iPad and Samsung’s Galaxy Tab, these factors have encouraged the rise of these white box tablets, explained Celia Bo, an industry analyst with the firm, in the report.

China, for one, is a market leader for such white box tablets, ABI noted, adding that many of these devices are targeted at domestic customers.

“While these [white box tablets] are not global brands yet, the very presence of such a thriving white box market in Asia is a good indicator of a growing market that is expected to see robust adoption rates in years to come,” stated Jeff Orr, principal analyst at ABI Research. More sophisticated tablets expected

The report also pointed out that many of the current batch of white box tablets have 7-inch display screens and run on Google’s mobile operating system Android.

Wi-Fi capability is included in most devices, which allows users to access content from the Internet through Web browsers or apps via Google’s Android Market. Other content hotspots include vendor-proprietary or regional online stores, which offer content in local languages as well as online stores run by mobile operators, ABI stated.

That said, many of these white box tablets are not sophisticated, yet. ABI Research’s practice director Kevin Burden noted in the report that many of these tablets started shipping only in the last 75 days, and manufacturers are still building out their market presence.

He added that these tablets do not show “any great degree of technological innovation”, but consumers can expect devices with “more ambitious capabilities” in the first quarter of 2011 from a new set of vendors.

In a separate report, research firm Gartner predicted that by 2011, 54.8 million tablets will be sold, possibly eating into the smartphone market if the 7-inch form factor gains traction among end-users.

GPU-based servers lack broad appeal

Graphics processing units (GPUs) have increasingly gained favor among companies that utilize high-performance computing (HPC), but programming challenges will limit the presence of such processors in many of today’s servers, industry insiders noted.

According to Dennis Ang, business development director of HPC and service provider at Hewlett-Packard (HP) Asia-Pacific and Japan, not all business applications can run on GPU chips. Additionally, it will take time for existing apps to be redesigned and ported over to run on GPU-based servers. These two factors will hamper widespread acceptance of such servers, he noted in his e-mail.

An IBM spokesperson ZDNet Asia spoke to agreed with the HP executive’s assessment. Sinisa Nikolic, high-performance computing program director at IBM Growth Markets said that “programming challenges” will continue to limit the adoption of GPU chips among server makers. While many high-end supercomputers have some graphics chip under the hood, these processers have not been widely taken up among enterprise server users, he noted.

However, with software advancement, this might change over time, Nikolic predicted in his e-mail.

On the current server landscape, Nikolic said that the vast majority of server deployments today are strictly central processing unit-based (CPU) without accelerators. CPU and GPU hybrids are a “distant second” while GPU-only servers are rarely seen, he added.

HP’s Ang said that the company is working hard to change this composition. He said that HP has close working relationships with key GPU vendors and is involved in partnerships to integrate graphics-based accelerator technology into its server platforms.

For instance, HP in October announced its first three-GPU blade server. With the graphics chip in place, the server is adept at performing floating-point calculations, which makes it capable of improving graphics performance, cheap HPC functionalities and emerging business needs such as cloud computing and Web serving, according to an earlier report by ZDNet Asia’s sister site ZDNet UK.

A good fit
Ang said that graphic processors are particularly gaining acceptance among organizations that need to accelerate their application delivery process. “GPUs are able to speed up delivery from between 10 to 100 times, depending on the application,” he explained.

GPU chips are also useful in the high-performance computing arena, the HP executive pointed out.

This usefulness was highlighted when the China-based Tianhe-1A was named the top supercomputer in November. Liu Guangming, chief of the National Supercomputer Center in Tianjin, where the supercomputer is housed, was quoted as saying: “The performance and efficiency of Tianhe-1A was simply not possible without GPUs.” In a separate report, a computer science professor said Tianhe-1A exploits the power of GPUs which are “awfully close to being uniquely suited to [the Linpack] benchmark [used to measure the TOP500 list of the world’s most powerful supercomputers]”.

Tapping onto the trend is cloud computing provider Amazon Web Services which added a GPU-based service for its Elastic Compute Cloud (EC2) in mid-November.

Dell acquires Compellent for US$960 million

Dell finally got its storage acquisition. On Monday, Dell said it is officially buying Compellent in a deal valued at US$960 million, or US$27.75 a share.

According to Dell, the Compellent acquisition will allow the company to better focus on data management, thin provisioning and storage for cloud computing shops.

After a failed bid to acquire 3Par–Dell lost out to Hewlett-Packard–the company needed to do something to bolster its storage line-up and remain a top 5 player. EMC is the storage leader and then the field is bunched with the likes of HP, NetApp and IBM. Dell was at risk of being on the outside of the storage pack.

Read more of “Dell acquires Compellent for US$960 million, lands its storage consolation prize” at ZDNet.

Lenovo: Convergence through cloud as future of IT

The future of innovation for the IT industry will be in data convergence, said Lenovo’s chief operating officer, adding that cloud computing and mobile Internet will play a big role for the company to achieve convergence.

In an interview with ZDNet Asia during his recent trip to Singapore, Rory Read, president and chief operating officer of Lenovo, said the convergence technology, which allows seamless movement of data from one device to another, will be the next wave of innovation for the next three to five years.

Users will not want to move their data from their smartphone to other devices manually, said Read, noting that this will need to be done seamlessly. “Think about it. You will take a picture with your smartphone or smart camera. It’s going to automatically, [via] 3G, link up and distribute that information to your laptop,” he illustrated.

Cloud computing and the mobile Internet will play key roles in data convergence, said Read. “It’s not about any single device, it’s about smart devices, the convergence of devices and applications, and content on the cloud. [It is about] the ubiquitous connection point of 3G and and applications on the cloud. That convergence is what will allow us to move data seamlessly.”

He pointed out that the company is already working on cloud computing and mobile Internet in China. With Lephone–the company’s smartphone which is now still limited to the Chinese market–Lenovo has worked with Chinese Internet companies such as Baidu, Ren Ren, and QQ, to build a tailored set of applications and content for users to access their information through the cloud on their smart devices, said Read.

The company will also be launching its tablet device, the LePad, in early January in China, and has plans to bring it out to the United States during spring to early summer, he said.

Read noted that while the company launches its devices first in China, its long-term strategy is to bring the gadgets to the global market. By using China as a launchpad, Lenovo can leverage its “power brand” in the country, its strong base, its supply chain, and its partners in building cloud computing apps, he said.

“What’s key here is that we need to build critical mass. In our industry, it is important to have scale,” he said. “[When] we win in China by getting a double-digit market share and significant base, that’s the time to bring our products to other markets.”

Read reiterated the importance of cloud computing and mobile Internet to the company’s future by saying that revenues from such services may reach 10 to 20 percent for the company over several years.

Despite the rising influence of these non-hardware trends, Read said the company will not go down the path of writing separate software applications. Instead, he added that its strategy is to deliver computing clients and partner with key players on content and software to develop convergence platforms that allow customers to access their data on the cloud.

Hardware spending to remain
While he believes the future of IT lies in convergence, Read said hardware spending in the present will remain strong despite reports that it will diminish even as software spending rises.

He ventured a guess that out of the world’s population of 6 billion, fewer than a billion have PC hardware. “There are still plenty of people who have to get the hardware to access the [software] interface and data,” he said.

He noted that the emerging markets will continue to grow and that Lenovo wants to continue to gain market share in those regions.

HTC: 60 million handsets anticipated in 2011?

Taiwan-based news outlet DigiTimes cited “industry sources” Friday in a report that claims cell phone manufacturer HTC will ship 60 million handsets in 2011, triple 2010’s number. It’s unclear as to whether this refers solely to smartphones or whether this also involves yet-to-be-released tablet devices.

As one of the biggest hardware manufacturers producing Android phones (from the successful Droid line to the discontinued Nexus One), this is a promising sign for the Google-built mobile operating system. HTC is also a big manufacturer of Windows Phone 7 devices, with the Surround on AT&T and the HD7 on T-Mobile.

No more information was provided in the DigiTimes rumor except that the sources in question floated the figure at a gathering of handset component suppliers in Taipei.

This article was first published as a blog post on CNET News.

Global semiconductor revenue to hit US$314B in 2011

The semiconductor industry is poised for sustained but slower growth in 2011 as worldwide revenue for the market is expected to reach US$314 billion in 2011, up 4.6 percent from US$300.3 billion in 2010, according to a study by Gartner.

In a report released Thursday, Gartner revealed that its latest semiconductor revenue estimate comes just a day after its previous statement that semiconductor earnings will surpass a landmark US$300 billion.

The analyst firm also stated that smartphones, mobile PCs and tablets will spur semiconductor growth through 2014.

Media tablets, in particular, are seeing rapid growth due to the success of the Apple iPad, it said. As market competition intensifies, Gartner estimates that semiconductor revenue from tablets will jump from US$2.4 billion in 2010 to US$17.8 billion in 2014.

Semiconductor income from mobile phones will also have continued growth in 2011, Gartner pointed out. Revenue had increased 23.2 percent from 2009 to US$48.7 billion in 2010. In 2011, revenue will move up 13.6 percent to reach US$55.4 billion.

On the flip side, Gartner noted that consumer PC purchases have been below expectations, while enterprise PC replacement cycles have weakened. It found that while semiconductor revenue from PCs increased 34.8 percent from 2009 to reach US$64 billion in 2010, the amount will drop 3.2 percent in 2011 to US$62 billion. Gartner attributed the decline to reduced DRAM (dynamic random access memory) prices.

However, it said other semiconductor PC components such as CPUs will still increase in revenue.

Ironically, Gartner discovered that the memory market, which had the strongest growth at 49.8 percent in 2010, will be the only semiconductor segment to have less revenue, slipping 2.4 percent in 2011.

Gartner elaborated that DRAM will fall 15.6 percent in 2011 as a result of prices and weak PC demand. Nonetheless, NAND memory will increase 24 percent because it is the main storage medium designed into many consumer products, Gartner said in the statement.

Despite the positive outlook for semiconductor sales in 2011, Gartner said the “modest chip correction” in the market that began in the third quarter of 2010 will likely spread to the first two quarters of 2011.

“Third-quarter sequential semiconductor revenue growth was below the seasonal norm, and fourth-quarter growth will also fall short and likely become negative for the first time in six quarters”, said Bryan Lewis, research vice president at Gartner.

The third quarter of 2010 was the turning point, noted Lewis. “Semiconductor manufacturing factory utilization rates peaked midyear, and subsequently started to reduce chip lead times and average selling prices”, he said.

Intel’s CEO: The PC ‘just doesn’t die’

Intel CEO Paul Otellini said reports of the demise of the PC are greatly exaggerated. “It is fashionable to write off the PC about every three or four years, and it just doesn’t die,” he said.

Speaking at a Barclays Capital investor conference, Otellini called the PC a Darwinian device that adapts over time.  “One of the things that drives the business and will continue to drive the business for the foreseeable future is PC growth,” he said.

To some degree, Otellini is talking Intel’s game. He can’t say the PC is dead when it is the largest chip maker on the planet, but he may have a point about the PC and netbook for that matter. The PC you bought 15 years ago looks nothing like the one you have today.

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