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Monthly Archives: August 2011

More on supply chain battles for …

preceding post: Supply chain battles for much improved levels of price/performance competitiveness [Aug 16, 2011]

Digitimes Insight: Acquisition of Motorola may enhance Android services [Aug 30, 2011]

Due to Google’s recent acquisition of Motorola including the tablet vendor’s mobile hardware business, market players have had growing concerns that Google may be heading toward the same business direction as Apple – to work on its own integration of software and hardware. With some of Google’s hardware partners already re-evaluating their strength of support for Android.

However, Digitimes Research believes that the chance for Google to put its focus on operating Motorola’s mobile hardware business is rather slim. Instead, through the acquisition of the hardware business, Google may be considering providing its partners with free hardware reference designs, which would improve its level of support and services, and could significantly affect the mobile device industry in the future.

If Google plans to put any focus on operating Motorola’s mobile device business, it would mean that Google will need to work on increasing the profitability of the hardware, but the idea would conflict with the original aims for Android – to lower the cost for consumers to access the Internet – since consumers will need to pay more to purchase the devices.

Meanwhile, Google is also unlikely to compete for market share through price competition as large shipments with low profitability can easily create inventory pile-ups during a economic slowdown.

Therefore, operating the business on a small scale, but maintaining its strategic role is the most suitable strategy for Google.

If Google’s operation of Motorola’s mobile device business shrinks down to only keeping teams for basic hardware design; software and hardware integration; and basic sales for future cooperation with telecom carriers, Google will be able provide free hardware reference designs for Android devicesto its brand and retail channel partners for production and sales.

Reference designs would greatly benefit brand vendors which have smaller production scales or are crossing over from other industries, as well as channel retailers and telecom carriers. These players will only need to place orders to Google-certified OEMs to be able to receive their shipments, completely eliminating R&D costs.

For Google, such a strategy would free the company from burdens such as back-end inventory, supply chain management, front-end marketing and after-sales services, while allowing Google to provide its users the same high-standard experience of Android, as well as the ability to control product quality.

For hardware players, which have strong R&D capabilities, if such a strategy comes true, these players will face tougher competition from smaller-scale players, as these players will be able to offer Android-based machines at lower prices, while still maintaining a standard level of quality.

For ODM players, their value of providing software and hardware design and integration services will be weakened as demand from clients will decline.

Samsung reportedly recruits ex-HP VP for PC business; considers buying webOS [Aug 29, 2011]

Samsung Electronics, despite refuting reports it plans to take over Hewlett-Packard’s (HP’s) PC business, reportedly has already recruited HP’s ex-vice president of PSG marketing Raymond Wah to handle Samsung’s PC sales, and the company is also reportedly considering purchasing webOS to compete head on against Apple and Google, according to sources from notebook players.

Both HP and Samsung have declined to comment about the purchase of webOS.

The sources noted that the acquisition of HP’s PC business, which has a rather low gross margin, may turn out to hurt Samsung’s panel and DRAM businesses that have rather high gross margins, therefore HP’s webOS may be the target that Samsung has the most interest in.

In addition, Google’s acquisition of Motorola, which may seriously threaten hardware brand vendors, could also trigger Samsung to purchase webOS as a counter measure, the sources added.

Regarding Recent Rumors about Samsung’s PC Business [Samsung Tomorrow, the Samsung Electronics Official Global Blog, Aug 24, 2011]

The recent rumors that Samsung Electronics will be taking over Hewlett-Packard Co.’s personal computer business are not true.

We hope this clarifies any confusion that may have occurred.

Samsung May Buy WebOS [Aug 30, 2011]

Samsung may purchase HP’s WebOS, in a move that would help the phone maker differentiate itself from other Android phone makers in the wake of Google’s Motorola acquisition.

HP recently announced it will spin off its consumer PC division and discontinue its WebOS operations, essentially exiting the smartphone and tablet business despite its software’s good reviews. Samsung, which earlier debunked rumors of acquiring HP’s PC division, may be investigating WebOS instead, according to website Digitimes.

The Korean company staked a claim for itself in the smartphone market with Android devices, like the growing Galaxy line, and has already developed its proprietary Bada platform, designed for newer smartphone users.

However, Google’s recently announced acquisition of phone maker Motorola is anticipated to change dynamics in the Android phone ecosystem as the company shifts from software into the hardware business. If Google becomes a probable rival, phone makers previously reliant on Android may choose to diversify their software options.

Many companies have already been doing this. HTC is set to launch a group of phones running Microsoft’s Windows Phone Mango release, and Samsung today announced it will roll out a line of Wave smartphones powered by Bada.

Acquiring WebOS would be another option for Samsung, as recent fire sales of HP’s discontinued TouchPad device illuminate the software, which has garnered strong reviews. With TouchPad stock nearly sold out, whoever owns the software may have a strong base of users that buys apps and attracts advertisers.

The OS already increased its market share in mobile advertising on the strength of the recent fire sale, one of many signs of a strange, surprising second life for the tablet and its platform. But HP may choose to retain its rights to WebOS and license the platform, as previously hinted.

However, because Samsung already has Bada, some believe HTC may be a more probable buyer of WebOS. The company uses third-party software on all of its phones, but may choose to increase its options as the Google-Motorola acquisition’s effects play out in the longer term.

WebOS was considered a moribund product when it initially launched with HP’s TouchPad a few weeks ago, but the surprisingly brisk fire sales may have given the OS at least a new lease. A new user base now exists for the software, and HP itself today promised software updates to cater to this new audience.

As the fate of Android after Google’s Motorola acquisition — as well as its increasing legal vulnerabilities in patent lawsuits — begins to loom over Android makers, many companies may eye WebOS in a new, favorable light.

Samsung enhances its own mobile platform with the launch of ‘bada 2.0’ [Samsung Tomorrow, the Samsung Electronics Official Global Blog, Aug 25, 2011]

Samsung Electronics has announced the bada 2.0 SDK (Software Development Kit), an application development tool for Samsung’s own mobile platform. Bada 2.0 is expected to be a catalyst in expanding the global distribution of bada smartphones, which have already received significant global sales.

Unveiled at Mobile World Congress in February 2011, bada 2.0 includes many compelling, new features. Borne of Samsung’s heritage in innovation, bada 2.0 brings together a wide variety of new capabilities including multi-tasking, Wi-Fi Direct, Near Field Communication (NFC) and voice recognition. It enables smartphone users to experience advanced services such as mobile payment, transport pass-card recharge and file sharing without Internet networking.

With the improved support for web applications including Flash and HTML 5, users can experience enhanced web capabilities. It also means that smartphones based on bada 2.0 can run any web application developed with Flash or HTML. Samsung expects that this upgrade will help to greatly expand its developer community into Flash and JavaScript as well as the existing C++ community.

A key feature for developer partners is the introduction of In-app Ads. Using the Ads API (Application Programming Interface) developers for bada 2.0 can easily insert advertisements, creating new revenue opportunities. Samsung has also upgraded and strengthened its application development environment, providing developers with increased support. An Emulator has been added to foster a development process suitable to the target environment. Tools such as Profiler optimize the device’s performance ensuring that resources like memory and processing power are used to their fullest capacity.

Samsung has enhanced the ‘Samsung Apps’ retail store and expanded full availability through to 121 countries worldwide. With this 2.0 version, more differentiated functions will be offered from Samsung Apps, including new purchasing options and recommendations.

“Samsung bada and our Wave devices continue to succeed around the world, taking advantage of the mobile technology and brand awareness of Samsung’s leadership in the market,”

-JK Shin, president and head of Samsung’s Mobile Communications Business

In the third quarter this year, three new Wave smartphones, powered by bada 2.0, will launch the market; the devices will range from premium models with enhanced performance to entry-level devices that focus on affordability. Bada 2.0 SDK can be downloaded from the bada developer site (developer.bada.com).

A Trio of new bada 2.0-powered ‘Wave’ Smartphones to Debut at Berlin [Samsung Tomorrow, the Samsung Electronics Official Global Blog, Aug 30, 2011]

Samsung Electronics has announced the launch of the flagship 4” chic smartphone Wave 3, the social-powerhouse Wave M and the smart-start Wave Y. These all wave smartphones will be on display at Samsung’s Stand at IFA 2011 in Berlin.

All three devices, borne of Samsung’s heritage in innovation, are powered by Samsung’s own new Bada 2.0 platform which brings together a wide variety of new capabilities including multi-tasking, Wi-Fi Direct, voice recognition and Near Field Communication.

ChatON is Samsung’s proprietary mobile communication service that works across all major mobile devices. A global cross-platform communication service links all your friends and contacts instantly. Micro-communities can be set up through group chat, while a web client allows the sharing of content and conversations between mobile and PC.

Samsung Apps, an integrated application store for Samsung smartphones, is also available. With an improved UI and enhanced store features, Samsung Apps offers a wide variety of applications from globally well-known content to locally-customized applications.

“Smartphones are gaining popularity by the day. The new additions to the Wave portfolio are the first to benefit from the power of our bada 2.0 platform; the full extent of our commitment is clear to see in each device. We’ve produced easy-to-use smartphones that will inspire the market,”

– JK Shin, President and Mobile Communications business

Smarts meet style, the Wave 3

The Samsung Wave 3 is a beautiful and chic smartphone that crams a market-leading 4” Super AMOLED display. Building on the Wave series’ style heritage in full metal design, the Wave 3 is the perfect device for the style-conscious consumer. Excellently constructed of anodized aluminum, the slim yet solid unibody design supports your active, on-the-move lifestyle. With smarter multi-tasking, seamless push notification and Wi-Fi Direct, the Wave 3 has the capabilities to keep you connected and entertained at all times.

The first ChatON equipped smartphone, the Wave M

The Samsung Wave M allows users to keep up-to-date with their hectic social lives with ChatON and Social Hub. With a wide 3.65” HVGA screen made from tempered glass and a metallic body, the Wave M lets users stay socially connected from everywhere. ChatON, streamlined messaging feeds, enhanced on-the-go web browsing and Wi-Fi applications deliver a seamless mobile experience. Wi-Fi Direct and NFC (optional) add further functionality.

A smart-start, the Wave Y

The Samsung Wave Y is the perfect device to introduce new users to the world of smartphone experiences. With a stylish metallic hairline body and large 3.2” HVGA screen, new users can take their first steps to mobile social networking with Social Hub and ChatON. Simple personalisation is enabled via the Live Panel, Lock Screen and Folder management, while Music Hub, a portable music manager, gives users a jukebox in their pocket.

Products Specification:


All Functionality, features, specifications and other product n formation provided n this content, including but not limited to the pricing, design, components, performance, benefits, capabilities, services and availability of the product, may vary by region and are subject to change without notice or obligation.

Asustek set to launch 5-6 Ultrabook models in October [Aug 29, 2011]

Asustek Computer is set to host a product launch conference for Ultrabooks in New York in October with prices to range from US$899-US$1,999, according to company chairman Jonney Shih.

Asustek will release 5-6 Ultrabook models in October with screen sizes of 11.6- or 13.3-inch.

Shih also noted that the recent price drop of several key components such as panels and DRAM has enabled the company to lower the overall cost of Ultrabooks, and with HP having abandoned its PC business, while Dell and Toshiba are expected to turn cautious about Ultrabooks, the new market is likely to be mainly propped up by Acer and Asustek.

Although Intel still has not accept downstream partners’ requests to cut Ultrabook CPU prices, the company has offered to provide extra assistance to allow its partners to launch sub-US$1,000 models, according to sources from upstream component players.

Asustek upbeat as shipments rise [Aug 27, 2011]

Asustek Computer Inc (華碩), the world’s No. 5 PC brand, yesterday said it expected revenues to regain their growth momentum in the third quarter, helped by a 16 percent growth in notebook computer shipments.

The company is aiming to ship 3.6 million notebooks this quarter, up about 16 percent from 3.1 million units last quarter, while it aims to double shipments of its tablet PCs to 800,000 units from 400,000 units, according to a company statement.

Shipments of netbook computers, which accounted for 13 percent of Asustek’s overall revenues in the second quarter this year, will grow slightly to 1.1 million units this quarter from 1 million the previous quarter.

Gross margins rose to 14.7 -percentfrom last year’s 11.9 percent, but were down from 15.5 percent in the first quarter of this year.

However, third-quarter gross margins might be “under pressure” because of Acer Inc’s (宏碁) aggressive promotion of its PCs in Europe to clear excess inventory, Asustek said.

The company, which is set to start selling its UX series ultrabook next month, is targeting a price range of US$799 to US$1,999, Asustek CEO Jerry Shen(沈振來) has said.

Acer said on Wednesday its ultrabooks would sell for between US$799 and US$1,199.

Intel has said it expected ultrabooks to initially sell for more than US$1,000, before dropping below that price point in the future.

Asustek will start selling higher-priced ultrabooks before it launches lower-priced models next year, Shen said.

Responding to analysts’ questions, he said Intel’s goal of seeing ultrabooks account for 40 percent of the consumer notebook market next year was “over-optimistic.”

He said since the product is still in the early stages of development and since there are issues to resolve such as heat dissipation and extending the battery life, the 40 percent target would only be achievable in 2013, after Intel launches its Haswell platform.

Shen also said it would focus on the Padfone — a smartphone-tablet combo— as its core smartphone development model.

[Padfone a 4.3-inch smartphone that can be inserted into its accompanying tablet’s rear docking unit, powering up the 10-inch panel to enable an enhanced multimedia experience. The tablet will only work when the smartphone is inserted into the dock.
ASUS Padfone Hands-On Introduction [May 31, 2011]
]

Here at ASUS we are firm believers behind the practice of design thinking. The Padfone has been specifically created to fulfill a demand for both smartphone and tablet users. It is a first of its kind innovation that allows you to switch seamlessly between pad and phone for a user experience that best-fits your activities, at any time. Internet access from the 3G network connection is shared between the phone and pad, as data storage is streamlined through a single storage pool.

“Compared with HTC (宏達電) or Samsung, which are good at developing smartphones, our idea of incorporating the phone into the tablet will ‘wow’ consumers,” he said.

Alex Sun (孫聰敏), corporate vice president of Asustek’s personal mobile devices business unit, last month said the company was finding a niche in the smartphone industryafter its two-year smartphone partnership with US portable navigation device maker Garmin Ltd fell through in January.

“It is the smartphone, not the tablet, that will be the highlight of the Padfone,” Sun said, adding that the tablet will only work when the smartphone is inserted into the dock.

He said prices for the Padfone would be close to that of Apple Inc’s iPhone. The Padfone will be launched in the first quarter of next year.

ASUS Padfone – Behind The Scene [May 30, 2011]

‧Enlarge your screen size any time you need to ‧Seamless transition of applications between pad and phone ‧Eliminate data transfer hassle with a single storage pool ‧One SIM card for two devices ‧Use the pad as an extended battery to charge your phone ‧Have a video conferencing experience and easily share with family and friends

ASUS Padfone – Enjoy the benefits of both Pad and Phone. Make The Switch [May 30, 2011]

Check the exclusive behind the scene footage of ASUS Padfone and people centric design concepts such as seamless data transfer, expandable screen size, 1 SIM card for two devices and more.

Asustek’s Padfone to use new version of Android OS [Aug 10, 2011]

Asustek Computer Inc. said Wednesday that its upcoming device, the Padfone, will run the next version of Google Inc.’s Android operating system, codenamed “Ice Cream Sandwich” (ICS), but the company appeared to be uncertain about the future of its mobile phone business.

The Padfone, which will go on sale at the end of this year or in the first quarter of 2012, allows users to display pictures or videos on a 10.1-inch tablet from a 4.3-inch smartphone seamlessly and to extend the battery life of the phone when the two are combined.

“We chose the ICS because of its better integration across different platforms,” Alex Sun, corporate vice president and general manager of Asustek’s personal mobile devices BU, told reporters on the sidelines of a media briefing to promote the local development of mobile apps.

The ICS, slated to be launched in the fourth quarter of this year, will improve the interoperability among these devices, allowing app developers to achieve higher synergy, according to market analysts.

Sun said Asustek also plans to launch the second generation of the Padfone in the first half of 2012, which is expected to support long-term evolution (LTE) wireless broadband technology and three-dimensional (3D) graphics.

However, Asustek will not launch any new phones by the end of this year because the company needs to “think about the future direction of its mobile phone business” after a shift in Asustek’s strategy for its smartphone lines, Sun added.

Last October, Asustek, which has been selling smartphones under the Garmin-Asus brand since early 2009, said it will not introduce any more co-branded handset models.

Instead, Asustek launched two new smartphones in China in March this year running on China Mobile’s Time Division Synchronous Code Division Multiple Access (TD-SCDMA) network, with the aim of attracting entry and mid-level smartphone users in the booming Chinese market.

The Taiwan-based PC brand sold about 1 million smartphones worldwide last year, but the company has declined to give a forecast for its total smartphone sales in 2011.

HP may resurrect TouchPad, weighs PC spinoff [Reuters, Aug 30, 2011]

Hewlett-Packard Co may resurrect its TouchPad as it weighs a spinoff of its personal computer arm, the head of its PC division said, suggesting HP might revive a tablet that lasted just six weeks in the face of stiff competition from Apple Inc.

HP stunned marketstwo weeks ago, when it announced it may shed its PC business — the world’s largest after the $25 billion acquisition of Compaq in 2002 — as part of a wrenching series of moves away from the consumer market. Those included killing off the TouchPad tablet computer.

Now, the board of the largest U.S. technology company by revenue is expected to decide before the end of the year whether to hive off its PC arm — which began selling the TouchPad in July — into a separate company, considered the best option for shareholders.

Personal Systems Group head Todd Bradley told Reuters in an interview he intends to lead any standalone company created, and expects it to be a full-fledged computer maker spanning tablets, ultra-thin and all-in-one PCs.

“Tablet computing is a segment of the market that’s relevant, absolutely,” he said, without elaborating. He said a spinoff of the Personal Systems Group will bring the “best value” to HP shareholders for taxation and other reasons.

“My intention would be to lead it through this transaction … and if it’s a standalone public company, to lead that.”

Selling the PC division to a rival such as Taiwan’s Acer Inc, which acquired computer maker Gateway in 2007, or to China’s Lenovo Group Ltd, which bought IBM’s PC division in 2004, is not a desirable alternative, Bradley said.

“I would just say that the numbers don’t support that that strategy works,” he said, citing Acer reporting its first-ever quarterly loss last week.

HP has struggled in the PC market — a high-revenue but low-margin business — as popular devices such as Apple’s iPadlure consumers away.

Bradley is on a trip to China, Taiwan and South Korea to meet with employees, suppliers, government officials and media to convince them that HP’s PC business will remain robust and committed to Asian markets.

“China’s obviously a critically important market for HP as well as PSG,” he said.

SUPPLIERS, DON’T FRET

Bradley said HP will increase investments in Shanghai, and over the next three years expand its Shanghai manufacturing base, consolidate six employee sites into one campus, and make Shanghai a regional headquarters in China for the PSG.

“Regardless of what happens, we’re the largest PC company in the world. We need everybody energized, and while this isn’t business as usual, we need people to go out and sell products every day,” Bradley said.

Suppliers to HP PCs will remain largely intact, although the company may renegotiate and redefine the relationships.

“Unwinding the integration that’s taken place within HP will be enormous amounts of work and effort, justified by the return we think we’ll be able to provide to our shareholders.”

Nevertheless, he said, “we will be one of, if not the largest, customers of all of our major suppliers, be it Samsung to LG to Microsoft to Intel.”

The Palo Alto, California-based company is now exploring options for its WebOS software, which it acquired through the acquisition of Palm, of which Bradley is a former chief executive.

Bradley has said that a number of companies had expressed interest in possibly using WebOS as an operating system, but he gave no further details on Tuesday, saying that he is not in China to announce or even negotiate anything regarding WebOS.

Acer Ultrabook pushing for September launch, says paper [Aug 31, 2011]

Acer reportedly is aiming to launch its Ultrabook in September to compete against Asustek’s UX21, which is also set to appear in the month, and has been pushing its development schedule; however, because the Ultrabook has not yet entered mass production, the plan may still be changed, according to a Chinese-language Commercial Timesreport.

An Acer executive also pointed out that the company has already revised the internal design of its Ultrabook twice and the company will only launch 13-inch models initially, the paper added.

Tablet PC fever is already cooling down, says Acer chairman [Aug 25, 2011]

Acer chairman JT Wang, commenting on tablet PC’s impact on the notebook industry, pointed out that tablet PC fever is already starting to cool down and consumers are also being attracted by notebooks again with Intel’s Ultrabooks and Microsoft’s Windows 8 the major attractions.

Acer is already set to launch an Ultrabook in September with a price as low as US$799, noted Wang adding that Acer has performed surveys and discovered that consumers have a high interest in Ultrabooks.

Some players in the PC industry agree with Wang’s prediction and pointed out that tablet PCs are mainly marketed for entertainment purposes, different from notebooks, which are also tools for work and learning. Therefore, once the tablet PC market reaches saturation, consumers’ motivation to replace tablet PCs will be a lot lower than for notebooks, causing tablet PC sales to stagnate once volumes reach a certain level.

In addition to Acer and Asustek Computer, which plan to launch Ultrabooks in September, Dell, Toshiba, Lenovo and Hewlett-Packard (HP) are all set to launch models in the fourth quarter of 2011 or the first quarter of 2012. Taiwan-based makers of components such as batteries, hinges and chassis have also started small volume pilot production, and are set to start mass shipments in the fourth quarter.

Acer president Jim Wong pointed out that although Ultrabooks will only account for a small portion of notebook shipments in 2011, the percentage is expected to reach 25-35% in 2012, a number close to Intel’s prediction of 40% by the end of 2012.

As for Windows 8, Wang believes that the operating system will contribute a stronger sales boost to notebooks than tablet PCs and will also benefit brand vendors during the back-to-school season in 2012 as the operating system’s launch date will be close to that period.

Ultrabooks and tablet PCs are short-term fads, says Acer founder [Aug 5, 2011]

Acer founder Stan Shihhas commented that the fads for ultrabooks and tablet PCs are both short-term phenomena and urged companies in the notebook supply chain to come out with more value-added products through innovation.

Shih added that Apple achieved success with iPad through its outside-the-box thinking, which is an attitude that all notebook players should learn.

Commenting on Apple bringing tablet PC and smartphone products into the PC market to compete with PC players and creating a great impact on PC demand, Shih pointed out that PCs are the base of the IT industry and tablet PCs are also developed from the base; therefore, in the future, products will still need to go through the PC platform to create even more add-on value.

As for whether Acer’s upcoming 7-inch tablet PC, which is priced less than NT$10,000 (US$345), will stir up price competition within the tablet PC industry, Shih pointed out that consumers want products with low price and convenience, and these are pressures that each player will need to face. Currently, the competition within the tablet PC market is still on track for positive development.

Acer founder optimistic about the new transition of the company [July 29, 2011]

Acer founder Stan Shih, commenting on market watchers’ concerns that the company’s purchase of iGware is overpriced, at an exhibition on July 28, pointed out that software is priceless and he believes the acquisition will give Acer a strong base to transition.

With tablet PCs having strongly impacted the traditional notebook industry, Shih pointed out that Taiwan players, which in the past only focused on developing hardware, and so have no environment to develop software, are all facing the key moment for transition.

Shih pointed out that the acquisition is a good chance for Acer, since the company is currently in the middle of a great transition and possession of world-class technologies is a must. Through the acquisition, Acer will be able to acquire a foundation and can start strengthening it to help it become world-class. This is the key motivation for the acquisition. As for concerns about overpricing, Shih only noted that everybody has a different point of view.

As for rumors that Acer’s ex-CEO Gianfranco Lanci may join Korea-based PC vendor Samsung, Shih, on July 26, pointed out that changing jobs is an usual event in the IT industry and market watchers should put too much focus on the information.

Ultrabooks may push down mainstream notebook prices [Aug 30, 2011]

As several first-tier notebook vendors are set launch sub-US$1,000 Ultrabook models in the near future, sources from channel retailers believe the appearance of Ultrabooks is likely to push vendors to reduce prices for their mainstream consumer notebooks.

Currently, notebook models that adopt ultra-thin designs are mostly high-end models with ASPs of NT$35,000 (US$1,206), a gap of about 40% compared to the ASP of mainstream notebooks.

Since consumers are likely to compare the specifications and price of notebook vendors’ Ultrabook and mainstream notebook models to make their purchasing choice, while some players such as Acer are set to launch Ultrabooks with a price as low as US$799, or Asustek Computer US$899, a range similar to that of the mainstream notebooks; therefore, the vendors may need to reduce prices of their mainstream notebooks in order to successfully digest inventory, the sources explained.

Digitimes Insight: Ultrabook key lies in penetration of ULV CPUs in mainstream notebook market [Aug 18, 2011]

Facing tablet PCs’ assault and Apple MacBook Air’s strong performance, Intel and notebook supply chain players have been pushing Ultrabook products aggressively, hoping to re-boost shipment growth of the notebook industry, and Intel is hoping its cooperation with the notebook ecosystem will increase the company’s competitiveness against Apple, according to Joanne Chien, senior analyst of Digitimes Research.

For notebook brand vendors, Ultrabooks will become a key product to defend against tablet PCs and Apple’s expansion in the IT market; however, if Intel intends to develop Ultrabooks with a similar business direction as MacBook Air, the company will end up failingbecause of high costs and uncoordinated business models, and the company will also miss the important chance to further develop into ultra-thin notebooks before ARM-based Windows 8 notebooks appear in the market.

Therefore, Ultrabook’s target segment should be the traditional notebook marketand not the niche ultra-thin notebook market, Chien noted.

Chien noted that the ultra-thin notebook market with products such as MacBook Air, limited by product cost and business model, is unlikely to become the major battlefield for the brand vendors’ Ultrabooks, but the 14- to 15-inch mainstream notebook markets are expected to see demand recover because of the adoption of Ultrabook’s design elements such as thin and light physical shapes, longer battery times, and faster boot times.

Chien added that allowing ultra low voltage (ULV) processors to penetrate into the mainstream notebook market would generate Intel more positives, compared to limiting them to the ultra-thin notebook market. The action would also help Intel to create a beneficial lineup to prevent ARM group from cutting into the notebook market; however, such a move will require Intel to compromise on its ULV CPU pricing.

First real chances for Marvell on the tablet and smartphone fronts

especially because: Kinoma is now the marvellous software owned by Marvell  [Feb 15, 2011]

Update [Aug 21, 2012]ZTE’s U880 is based on Marvell’s then market leading PXA920 single chip SoC, and was introduced a year ago at a list price of ¥1499 – US$235 but the street price came down to ¥958 – US$150 in October and now it is as low as ¥699 – US$110 [Aug 21, 2012], actually on Amazon in China (see: http://detail.zol.com.cn/cell_phone/index284242.shtml). ZTE achieved U880 sales of more than 3 million by May 15, 2012 by which it was the star TD smartphone as per 中国移动将推全频段TD终端 普及HSUPA report from Communications World Network.
End of update

Earlier updates: – Marvell Technology Group Hones Edge [Seeking Alpha, Jan 19, 2012]

For investors the last few years with Marvell have been tough. The stock pays no dividend. After splitting in 2004 and again in 2006, the stock price entered 2007 at well over $20 per share. At the 2008 bottom it hit a low around $4.48. Today it ended sharply up at $15.12 and represents a market capitalization of $8.8 billion.

These stock price gyrations exaggerated Marvell’s changes in revenues and net income. Total 2006 (fiscal 2007) revenue was $2.24 billion, with slightly negative net income. Revenues for 2010 (fiscal year 2011, ending January 29) were up to $3.6 billion, with net income hitting $904 million. This fiscal year 2012 revenues are trending towards $3.45 billion, but with just $690 million net income.

Meanwhile the main good news has been the rapid ramping of sales of Marvell-processor based smartphones in China. Marvell’s chips not only include the processor, but most of the functions needed to run a smartphone (graphics, cellular modem, wi-fi, bluetooth). Thus while brand-happy Chinese are dying (almost literally) to get iPhones, the middle-class masses are buying Android based smartphones that run on a new high-speed, invented-in-China protocol, TD. The ramp in revenue from this in calendar 2012 will be substantial, and the baseline should be noted in the Q4 report due in early March.

Which brings us back to CES (and leaves out Marvell’s leading enterprise-grade Wi-Fi and wired internet switch chips). I can only hit highlights, so many products were introduced.

Foremost, Google (GOOG) chose Marvell’s ARMADA 1500 HD Media System-on-Chip (SoC) for the next generation of Google TV. While there is no guarantee that Google TV will become a mass market product, it does much to validate the hundreds of millions of dollars Marvell has invested in research and development for ARMADA and related technologies. ARMADA is ARM-based and contains many of the same technologies used with smartphones and tablets. Google has worked closely with NVIDIA (NVDA), Qualcomm (QCOM) and other ARM-based chip designers; this is a clear sign Marvell is also in the inner circle. The ARMADA chip series has been adopted by OEMs for a wide range of consumer and business appliance applications. See also ARMADA and PXA application processors.

Plug computers are a Marvell invention: inexpensive, small but powerful computers that plug directly into electric sockets and can act as local servers. SMILE plugs are designed to connect a classroom of up to 60 students and complement the One Laptop per Child program and Marvell ARMADA based low cost, low power tablet computers. This is mainly for developing nations, but given funding shortages should be considered by U.S. schools as well.

In storage, much has been said about replacing hard drives with SSDs, and PCs with Flash-based tablets. Change has come slowly. Marvell already leads in SSD controller chips. Now it introduced a chip that attached through PCIe, an existing, faster port than the standard SATA disk port. Everyone agrees this will be popular. Alternately another chip allows for an SSD and hard drive to function together better, to lower response times while keeping bulk storage costs low.

Consumer home connectivity and automation were addressed by several products. New models of Avastar wireless chips make it easier for all sorts of devices to connect, including Internet phones and video surveillance. Lighting with LEDs was specifically addressed with new, automation-ready chips. The Smart Energy Platform, a combination of a wireless microcontroller and management software, is aimed at lowering price points for energy-conscious appliances in the home.

Except for Google, OEMs will make their own announcements as branded products become available this year.

I will wait on management’s Q4 fiscal 2012 in early March before trying to estimate directionality for the new year. Technology is rapidly evolving. More individual devices mean more information needs to be stored in the cloud, requiring in turn more HDD storage and connectivity. All these trends favor Marvell, but competitors will be gunning for the same revenue and profits.

What do I think would most enhance shareholder value? A dividend. As of last quarter Marvell had 2.4 billion in cash, no debt, and cash flow of $262 million. Marvell has used its cash mainly for stock buy backs, and is likely to continue to do so.

China Outstrips U.S. in Smartphone Market [Nov 23, 2011]

Deliveries of smart phones to operators and retailers in China grew 58% in the third quarter from the previous quarter to 24 million units. That surpassed 23 million units delivered to the U.S. market, down 7% from the previous quarter …

Nokia Corp. had the largest share of China’s smartphone market in the third quarter, with 29%. … Samsung Electronics Co. Ltd. is chasing hard with 18% of the Chinese market …

Strategy Analytics estimates that 57% of the world’s handsets were manufactured in China in 2010. … two of Nokia’s eight production facilities are based in China and the company said China is also one of its bigger suppliers of mobile handset components. …

TD-SCDMA: US$3B into the network (by the end of 2012) and 6 million phones procured (just in October) [Oct 18, 2011]: meaning a mature TD-SCDMA market (finally) with 627 million potential customers of which only 6.4% are on the 3G
Marvell, Lenovo and China Mobile Team Up To Drive Mass Market Adoption of China’s 3G TD-SCDMA Smartphones [Oct 26, 2011]

Marvell (NASDAQ: MRVL), a worldwide leader in integrated silicon solutions, today announced the launch of Lenovo’s LePhone A66t, a 3.5-inch high-definition screen smartphone customized for China Mobile’s 3G TD-SCDMA market and priced in the 1,000 RMB range [US$ 157]. The LePhone A66t is powered by the Marvell® PXA918 [@624MHz] platform, the first commercially available single-chip solution that integrates a high-performance, low-power application processor with an advanced multimode modem. Marvell’s advanced low-power TD single-chip solution is designed to enable exceptional user experience for watching mobile TV, navigation, video conferencing, social networking, and other popular mobile applications. It also features the Marvell Avastar™ 88W8787 wireless solution, which is Bluetooth 3.0 and FM enabled, offering exceptional Wi-Fi range with beamforming technology, robust 802.11n connectivity and crystal clear audio quality.

“As the second largest provider of PCs and other consumer electronics worldwide, Lenovo is committed to drive the connected lifestyle for billions of consumers around the world. Our LePhone A66t is an ideal mobile device that enables consumers easy access to social networking, e-commerce, gaming and mobile TV at an affordable price of around 1,000 RMB,” said Feng Xing, vice president and general manager of business operation at Lenovo. “Our partner Marvell is one of the top semiconductor leaders that has delivered the most advanced and competitive China 3G TD-SCDMA solution. I believe the introduction of the Lenovo LePhone A66t is a game-changer for the mass adoption of China Mobile’s 3G smartphones.”

“We’re happy to see the successful collaboration between Marvell and Lenovo for creating a world-class China 3G smartphone,” said Xing Hongtao, Deputy General Manager of Marketing, China Mobile Beijing Branch. “China Mobile is very excited on the fast adoption of the advanced 1,000 RMB smartphones and we’re confident of the explosive smartphone growth in the years to come.”

Lenovo’s LePhone A66t smartphone will provide consumers a high quality CMMB digital TV experience, along with best-in-class Wi-Fi connectivity, all delivered in a sleek and sophisticated design form factor. Powered by the Marvell PXA918, Lenovo’s LePhone A66t also features Android 2.2 Operating System, Mobile Hotspot capability, a 3.5 inch high-definition screen with multi-touch support, Marvell RF808 RF transceiver and a Marvell PM8607 integrated audio and power management solution.

For more information about the Marvell PXA918, please visit www.marvell.com/communication-processors/pxa918/ or contact a sales representative.

Samsung Selects Marvell’s Industry Leading China 3G TD-SCDMA Solution for Its New S5820 Android Smartphone with Breakthrough Social-Networking, Mobile Gaming and Mobile TV Capabilities [Oct 19, 2011]

Marvell continues to drive mass market adoption of China’s 3G TD-SCDMA standard and affirms the leadership of its PXA920, the industry’s first commercially available single-chip TD-SCDMA solution, and its Avastar 88W8787 wireless solution

… supporting China Mobile’s TD-HSPA (Time Division High-Speed Packet Access) network. It also features the Marvell Avastar™ 88W8787 wireless solution, which is Bluetooth 3.0 and FM enabled, offering exceptional Wi-Fi range with beamforming technology, robust 802.11n connectivity and crystal clear audio quality. The phone is available now through the retail stores of China Mobile, the largest mobile carrier in the world with over 650 million subscribers.

Update: Price of Samsung S5820 [Aug 21, 2012]: 1288 – US$203 (see: http://www.xj1616.com/product-1797.html)
The price leader is the ZTE-T U880 which has similar specification and a street price of ¥699 – US$110  [Aug 21, 2012] as the lowest.on Amazon in China (see: http://detail.zol.com.cn/cell_phone/index284242.shtml).
End of the update

Price of Samsung S5820 [Oct 22, 2011]: ¥1798 – US$282 (see: http://www.xj1616.com/product-1797.html)
[¥2518 – US$395 is shown striked over, so that could be a kind of list price.]
The price leader is the ZTE-T U880 which has similar specification and a street price of ¥958 – US$150 (see: http://detail.zol.com.cn/cell_phone/index284242.shtml). The list price is ¥1499 – US$235, but the W-SCDMA ZTE Blade version is just ¥1280 – US$200 with street price as low as ¥898 – US$141. Keep in mind however that the later has an only 750 DMIPS CPU [ARM1136 @600MHz] while the PXA920 has an 1168 DMIPS CPU [Marvell PJ1 Sheeva @800MHz].)
Marvell Drives New Rollout of TD-SCDMA Smartphones from China Mobile, the World’s Largest Mobile Operator [June 28, 2011] (emphasis is mine)

ZTE Launch Signals New Era of TD-SCDMA Smart Devices in China Powered by Marvell’s Industry-First Single Chipe Solutions

Blade U880, one of ZTE’s flagship smartphones, is powered by the Marvell® PXA920 and features a 3.5 inch WVGA capacitive touchscreen at a resolution of 800 x 480 pixels, delivering exquisite pictures with rich colors and multi-touch. Other features include Android 2.2 support, a TD-SCDMA +WLAN dual wireless Web connection, WLAN-AP wireless routing, CMMB (MBBMS) mobile phone TV, a 5 megapixel auto-focus camera, 720p high-definition video, GPS/AGPS navigation and a 3D graphics processing accelerator.

The TD version of ZTE Blade could be price leader because except the PXA920 SoC the rest of it is based on ZTE’s highest volume smartphone, the W-CDMA-based ZTE Blade.
See: ZTE Achieves 35 Million Handsets Milestone in First Half of 2011 [Aug 9, 2011]

 In 2011, ZTE’s Blade also became one of the world’s top-selling smartphones. Through partnerships with approximately 80 operators globally [see the ZTE Blade in wikipedia for operator branding], ZTE’s Blade is now available in nearly 50 countries and regions. The Blade’s daily sales in China are the nation’s highest for Android smartphones, averaging 16,000 units per day. ZTE has now sold 2.5 million Blade handsets globally and expects to break the five million mark this year.

[This was actually achieved by a big order: ZTE Receives Order for 2 Million ZTE Blade V880 Smartphones from China Unicom [Sept 26, 2011]]

Samsung S5820[-TD-HSDPA] [Samsung product page in Chinese only, Sept 14, 2011, as translated by Google]

Metallic appearance
– Metal body delightful sparkling.

Android ™ 2.3 smart operating system
– Android ™ 2.3 smart operating platform one-upmanship.

Social applications pre-installed
– Pre-happy network, all network, flying letters, Sina microblogging, social network are collected, and enjoy social fun.

WLAN high-speed Internet
– WLAN high-speed Internet access speed challenge.

CMMB mobile TV and mobile data services
– CMMB mobile TV and mobile data services, rich applications endless.

Marvell Showcases 16 China Mobile TD-SCDMA Smartphones from Leading Global OEMs at PT/EXPO Comm China 2011 [Sept 25, 2011]

Product display at PT/EXPO highlights ongoing collaboration between Marvell, China Mobile and leading global OEMs to deliver affordable, advanced China’s 3G TD-SCDMA smartphones to the world’s largest mobile market

Marvell (Nasdaq: MRVL), a worldwide leader in integrated silicon solutions, today announced it will showcase a full suite of China’s 3G TD-SCDMA solutions at PT/EXPO Comm China 2011 in booth 1B005. The lineup includes smartphones, tablets and mobile hotspots powered by Marvell’s PXA920 single-chip product line and the PXA1202, the industry’s first Downlink Dual Carrier (DLDC) TD-HSPA+modem. Considered the most influential exhibition for China’s burgeoning communications industry, PT/EXPO Comm China 2011 takes place September 26 to 30 in Beijing. Marvell will demonstrate a total of 16 TD smart devices that feature its single-chip solutions from leading global OEMs: ASUS, Hisense, Huawei, Guangdong Mobile, Motorola, RIM, Samsung, Sharp, Sony Ericsson, Yulong and ZTE.

“We’re very pleased to see the great progress we’ve made with our vision of the connected lifestyle for everyone in the world. I believe the breakthrough in our China’s 3G TD-SCDMA technology with the largest mobile carrier, China Mobile, in the largest mobile market, is a major milestone and testimony to our vision. When China Mobile began its mission to build an advanced and affordable smartphone more than four years ago, Marvell was the major silicon partner who committed to the program because we believed in China Mobile’s vision and bright future of this great opportunity,” said Weili Dai, Marvell’s Co-Founder. “I believe Marvell has enabled a quantum leap in the development and adoption of the TD-SCDMA standard. For example, Marvell is leading the way to a new era of seamless global connectivity for the masses with the industry’s first single chip 3G/4G modem with support for FDD-LTE, TDD-LTE, HSPA+, TD-SDMA, and EDGE. Now through our work with other industry leaders, billions of end users can experience high-performance web browsing, live video, 3D gaming and other popular features on affordable, advanced devices including smartphones, tablets and mobile hot spots. I am very proud and thankful for Marvell’s global team of engineers for their hard work, innovation and dedication to move the industry forward. The products we are showcasing exemplify what can be accomplished with cutting-edge technology – and this is only the beginning of what’s to come with our continued commitment to TD-SCDMA.”

Marvell has partnered with the TD Industry Alliance (TDIA) at the show to demonstrate the rapid adoption and product implementation of TD-SCDMA. With its technological achievements and commitment to innovation, Marvell has been a strong supporter and contributor to the evolution of the TD-SCDMA industry in China. Other government, telecom operators and Marvell partners such as MIIT and China Mobile will also be in attendance, making the event the de facto meeting place for decision-makers in the TD ecosystem.

All of the products to be displayed – ranging from entry-level smart devices to mid-level devices with rich multimedia functions and 3D graphics – feature Marvell’s PXA 920 family of silicon, including:

  • The PXA920 – The industry’s first single-chip TD solution designed for multimedia-centric handsets featuring support for both TD-SCDMA and GSM/EDGE and now shipping in more than 10 devices.
  • The PXA918 – Tailor-made for entry-level smart devices, featuring 55 nm technology, 624 Mhz processors and rich multimedia functions.
  • The PXA920H – Designed for mid- and high-end smart devices featuring 55 nm technology, a 1Ghz processor and support for 720p video and 250mpps 3D graphics.

Marvell will also showcase the industry’s first DLDC TD-HSPA+ Modem PXA1202, a pivotal milestone in advancing China’s TD-SCDMA standard, which can help to achieve 4X data rate increase on TD-SCDMA networks. Featuring 40 nm technology and backwards compatible with previous generations of TD-SCDMA network equipment, the PXA1202 supports DLDC, 64QAM and TS0 enhancement technologies. It is also designed to enable seamless performance with bandwidth-hungry mobile applications and multimedia devices.

Marvell’s PXA920 Family of SoCs

PXA918

PXA920

PXA920H

Target market entry-level smart devices (a lower-cost yet high performance solution for multimedia-centric handsets) multimedia-centric handsets mid- and high-end smart devices (to provide higher performance solution for multimedia-centric handsets)
Silicon technology 55 nm 55 nm 55 nm
Clock frequency 624MHz 806 MHz 1GHz
Dhrystone performance 870 DMIPS 1130 DMIPS 1400 DMIPS
Memory interface LPDDR1 LPDDR1 LPDDR2
3D graphics performance up to 8Mtriangle/s and 150Mpixel/s fill rate up to 10M triangles/s sustained (20M triangles/s peak at 50% cull rate) and 200M pixels/s fill rate up to 12Mtriangle/s sustained and 250Mpixel/s fill rate
Video playback performance D1 at 30 fps for H.264, WMV, MPEG-4, H.263 720p at 30 fps for H.264, WMV, MPEG-4, H.263 720p at 30 fps for H.264, WMV, MPEG-4, H.263
Video capture performance D1 at 24 fps for H.264, WMV, MPEG-4, H.263 D1 at 30 fps for H.264, WMV, MPEG-4, H.263 D1 at 30 fps for H.264, WMV, MPEG-4, H.263

The block diagram for the SoCs is the same as shown by the PXA918 case below (only the above data written into the blocks is different):

the rest is in the: Complete information in PDF: Marvell PXA920 Family of SoCs [Sept 25, 2011]

End of earlier updates

How Marvell is doing after Marvell’s single chip TD-SCDMA solutions beaten (again) by two-chip solutions of Chinese vendors [July 11, 2011] despite High expectations on Marvell’s opportunities with China Mobile [May 28, 2011] as well as Marvell to capitalize on BRIC market with the Moby tablet [Feb 3, 2011]?

All excerpts below are from Marvell Technology Group’s CEO Discusses Q2 2012 Results – Earnings Call Transcript and the related Question-and-Answer Session[Seeking Alpha, Aug 18, 2011]. If no question is present before a statement from a Marvell executive then it is from the presentation part. The order of excerpts is different from that of in the transcripts. Sehat Sutardja is the CEO of the company, while Clyde Hosein is Marvell’s CFO.

First question is, you guys recently — made your first foray into the tablet market. It was — I believe it was a VIZIO Tablet launched through Costco. I was wondering if you can give us any color on kind of what the initial uptake or feedback has been around that device?

Clyde Hosein: It’s still early, Sanjay, you pointed to our first foray. The price point is, we believe, is very attractive. So it’s geared for people who perhaps cater for the higher end ones. And that price has been coming down, and expected to come down in the future, and as we develop more and follow-on products. So initial reaction is very good, but it’s still early. And I don’t think we want to make too much out of it at this early stage in the game, but it’s, I think, price performance in a very good place.

All the relevant information about the VIZIO tablet, as well as VIZIO’s general CE strategy you can find in Innovative entertainment class [Android] tablet from VIZIO plus a unified UX for all cloud based CE devices, from TVs to smartphones [Aug 21, 2011].

Sehat Sutardja: … in our mobile and wireless end market, Q2 revenues increased approximately 18% sequentially and represented approximately 26% of our overall revenues. The sequential increase was driven by growth from our new products such as TD in China, and seasonal growth from our wireless connectivity solutions. We believe the headwinds that faced our mobile and wireless end market in the prior quarters are mostly behind us, and we expect to make solid progress moving forward.

Today, we continue to be the only provider of a single-chip TD smartphone solution. These has resulted in over 20 TD smartphones being deployed both at OEM providers and white box manufacturers with our solutions.

For example, during the last quarter, ZTE announced our 4 new Marvell-based TD devices. In addition, Motorola, Huawei, Samsung, and others are currently deploying TD smartphones based on Marvell’s solutions. We are proud to say that working closely with our customers, we have helped them achieve an unsubsidized price point of $100 for TD smartphone, a first in the industry.

In the coming months, many of these handsets will be deployed in multiple Chinese provinces, both through the carrier and the channel. Our revenues for TD smartphones have roughly doubled in the last quarter, and we expect double-digit sequential growth again in the third quarter.

In addition to TD, business at our largest existing mobile customer [obviously RIM] has stabilized. We expect new 3G handset devices with Marvell solutions, Marvell silicon, to come to the market in the near term, targeting the high-volume segment. Further expanding our customer base during the second half of our fiscal year, we expect to launch multiple Android-based handsets targeted for consumers in Europe, Asia and South America.

… when does, or does RIM become kind of irrelevant in the context of the overall mobile and wireless business?

Clyde Hosein: … Our dependence, however, on any single customer in the mobile space today is much lower than it was at any given period since we bought this business 5 years ago. So as Sehat mentioned earlier, we are ramping up on TD. That’s beginning to do very, very well. Marvell is really acing it on the smartphones part of it. We mentioned earlier, we’ve got price point as low as $100. This is unsubsidized into the channel. We believe that there’s a huge demand for — a huge inflection point for low-cost smartphones, and we believe we’re delivering that in this space. In addition to that, we are on the cusp and inflection of non-TD Android-based smartphones. There’s a couple that we expect to come out, we had said second half of this year, that’s still on track. So you’ll see that probably in the next quarter or 2, you’ll see very [indiscernible]. …

Sehat Sutardja: I think investors should not discount RIM. We continue to work closely with RIM in delivering new solutions. They will make the product to look really, really nice, and better performance as well. So don’t discount that. Don’t discount it at all.

Sehat, what’s kind of the read through on demand and sell-through of either the high-end Android or OMS-based TD phones thus far?

Sehat Sutardja: So as we said, we are the first to work with our customers to deliver $100 TD smartphones. This is unprecedented. Just about a year ago, these phones are [were] selling for about $400 to $500 because they are [were]based on multiple chips in a system and [that] requires a very complex implementation. As the price gets to the $100 price point, the demand actually is increasing rapidly. This is what we expect to see. And we projected this was going to happen, and we’re seeing that. We’re seeing the customer demand is increasing. And also as more and more of these products [are] qualify[ied] by China Mobile to be released into the market, we expect the volume will continue to ramp. So we’re talking about phones there that are not much higher than a low end — I mean, like a high-end feature phone. Maybe even a similar price point, just if you take into account of the touchscreen feature phones. Literally, there’s not much difference in the bill of material to build those higher touchscreen feature phonesbecause these smartphones that we’re delivering. So we are very, very optimistic that more and more — the success of many of these customers will lead to other successes.

I’m kind of curious specific to the TD business. Can you help us quantify what percent of mobile wireless it is today? And as we think about kind of the market opportunity here, where do you think that can go over the next several quarters?

Clyde Hosein: So it’s a small part today. It’s just getting started and we think, as I have indicated, we think it’s a huge opportunity. We aren’t disclosing any, whether it’s TD or anything but specific segments. But it’s a small percent of the total today. And looking forward, a lot will depend on the consumption rates in China. We are opening up — or there is a lot more channels opening up in the next few months, so I expect that to pick up. Especially wide-box channels in each of the provinces that open up with these phones. So that should expect to pick up. Tough to predict. We think it’s a huge opportunity. There is several hundred million people who at the right price point, a significant percent of them should convert. But I think the next few months would tell us better. So we firmly believe and continue to believe that these smartphones at this price range, again $100 at the low end unsubsidized, we’re already there within 2 quarters of introduction of the technology. We think that’s an inflection point for demand. It’s hard to predict what the next 2 quarter’s demand is going to be. They sell-through today, some of our revenues for the quarter is already on a sell-through basis, granted some of it is in channel. But some of it is already sell-through. People have phones already, users, and we expect that to accelerate. But the penetration rate since the new market, new country, new set of users, difficult to predict near term. We are bullish in the long haul.

Sehat Sutardja: But in the long run, I think every time you ask for a short-term, a quarter, 2 quarters, I consider short-term projection. That’s very hard to project ramps. They can be — where the slope could be 10% slope, or 5% slope, or 15% slope. So those kind of projection is extremely dangerous to provide. But what we believe internally is that when you — when China Mobile has 500 million plus — or 550 to 600 million subscribers, okay, we can model whether it’s, okay, 2 to 3 years from now whether the 30% of it will be TD smartphones. Is that going to be 40%, is it going to be 30%? Now this is a kind of model that we can play. Of course everything is based on the price elasticity. So if the price goes to $100, how many percent do we expect this thing to be maturing at. When price goes to $70, what does it mean? And I don’t see any reason why this thing cannot be $70 in a year or so from now, for example. So we are bullish in the long run. Just a short term look, it’s very hard to say exactly what that slope begins to look like.

Let me just ask you about the TD LTE transition. … Will those be phones or will those be downloads [dongles]? And as you speak to China Mobile, how do they balance the transition to TD LTE with the extensive investments they’ve made in TD-SCDMA?

Sehat Sutardja: Well, yes, TD LTEs, as you should expect in any new deployment, the dongle will definitely will go in first. It’s easier to qualify the dongle. But the biggest volume, obviously, is not in dongle, the biggest volumes will be the handset. And when you go to the handset, more likely you will go into the highest end, highest price, the high-priced handset. So that will be, more likely, the phase-in of the TD LTE. So nothing surprising. So, okay, the key is, okay, over time, is to build lower price higher integration single-chip solutions to get to the mass-market TD LTE. So don’t expect that to happen, the volume to ramp up on the mass-market any time in next year. But to get a TD, as you say, China Mobile is really investing huge amount of dollars and resources in the infrastructure, base stations, several hundred — more than 200,000 base stations deployed with TD-SCDMA. So those are the ones that most likely to be ramped up first, okay, and then follow a certain selected cities — I mean, maybe not in every part of city, but like certain, in maybe the downtown area, where maybe they will start deploying a trial TD LTE deployment to test the system. Well, maybe, I don’t know, a year or so before they were all moved — before they all spread it out to the more major market. So we have nothing surprising. These things will have its own course. The key for us is to think we work very close with China Mobile, also, to make sure they have our specifications for the TD LTE is what they need.

… can you guys review where you stand with … not TD LTE, but just traditional LTE?

Sehat Sutardja: … So related to FDD, LTE, or TDD LTE, we have already sample[d] FDD LTE, so we talked last quarter. So what we’re talking about the TDD, is that the LTE and the TDD, is we’re we have to wait for that sample at the end of this year, specifically related to the requirements that China Mobile are putting into the marketplace.

Innovative entertainment class [Android] tablet from VIZIO plus a unified UX for all cloud based CE devices, from TVs to smartphones

Update: Vizio Jumps Into PC Fray [The Wall Street Journal, Jan 7, 2012]

Vizio Inc., which shook up the market with inexpensive high-definition televisions, now wants to become a computer manufacturer.

The Irvine, Calif., company, which ranks as one of the top sellers of televisions in the U.S., plans to show a line of thin laptop computers and all-in-one desktop PCs running Microsoft Corp.’s Windows software next week at the Consumer Electronics Show in Las Vegas.

Vizio, which also produces Blu-ray players and a tablet, says it worked on its computer designs for two years in attempts to offer an aesthetic that competes with Apple Inc.’s popular products but at a lower price.

Vizio says it spent months, for example, shaving millimeters from its desktop computer so the central processing chip could hide in a sleek base while the screen stands attached to its thin aluminum neck.

“It doesn’t look mechanical or industrial,” said Matthew McRae, Vizio’s technology chief. “The industrial design is something we sweat.”

The closely held company said it is well aware it is entering an already crowded market. Hewlett-Packard Co., Lenovo Group Ltd., Dell Inc., Acer Inc., Toshiba Corp. and Asustek Computer Inc. are among the competitors that have staked out nearly all of the computer market. Most compete for attention from either price-conscious consumers or value-focused corporate customers.

One result has been continually falling prices and ever-tight profit margins. But Vizio said it believes its brand will entice consumers looking for distinctive designs at attractive pricing.

It is not yet specifying price points for its computers, which aren’t expected to go on sale until May. But Mr. McRae said they will cost “substantially less” than comparable products from Apple. He said the company isn’t shooting for the price range of low-end laptops, many of which sell for around $499.

The announcement comes as many other companies are trying to emulate Apple’s ultra-thin MacBook Air—which starts at $999 for an 11-inch screen—with models called ultrabooks that mainly range in price from $899 to $1,400. Vizio isn’t using the ultrabook moniker, but its laptops are also thin and offer screens ranging from 14 inches to 15.6 inches.

Vizio has been able to offer its televisions, accessories and tablets at lower prices by keeping a small staff and restricting itself to a smaller number of products. Vizio also standardizes many parts across its product line, allowing it to buy parts in bulk for cheaper prices.

The company expanded its lineup to include an 8-inch tablet, which uses Google Inc.’s Android mobile operating system. Vizio said its supply of the device—priced at $329, compared with the $499 entry price for Apple’s 9.7-inch iPad—quickly sold out after the debut in August, marking unusual demand in a crowded market where few iPad rivals have done well.

We underestimated demand,” Mr. McRae said. He declined to disclose sales other than to say the company sold out of its initial inventory in four months and that unit sales are “way over six-figures.”

Mr. McRae said his team is working on software that will help Vizio’s televisions to share content, like movies, with its computers and tablets connected to a home network. That software, which Vizio said it plans to offer for competitors’ laptops and tablets as well, will be part of a larger strategy to tie its line of products together.

A planned update of the software will help different devices interact with one another, Mr. McRae said. A customer watching “Two and a Half Men,” for example, could open a program on his Vizio laptop that would tell him details about the episode, offer other information on the series and even connections to social networks.

Such features could help the company distinguish itself in the crowded PC market, said Tom Mainelli, an analyst at IDC.

“If they’re smart about how they bundle these products together, and make it clear your Vizio PC will talk to your Vizio TV and media tablet, it could be pretty interesting,” he said. “Customers want to share content across these devices.”

VIZIO 8” Tablet with WiFi - Aug-2011

VIZIO 8” Tablet with WiFi [Aug 16, 2011]:
VTAB1008
Model Features

– 8″ high resolution 1024 x 768 touch screen
– VIZIO Internet Apps Plus™ [V.I.A. Plus UI]
– 802.11n WiFi and Bluetooth®
– Front facing camera
– HDMI® video output – play video and music on your TV
– Multiple speakers for premium audio in portrait and landscape
– Built-in IR blaster with universal remote control app

… Access hundreds of thousands of apps from the Android Market™ to enjoy movies, TV shows, music and more†. … Master your domain with the Tablet’s built-in IR blaster and universal remote control app. This VIZIO-exclusive app enables the Tablet to communicate with your home theater devices‡ and control them all with the Tablet. You can also set up a profile for each room in your house and then control those devices as you move from room to room. The built-in HDMI® port is fully HDCP compliant so you can output HD video to multiple TVs and monitors, making it a breeze to watch  HD content on your big screen HDTV**. …
†A wireless connection is required to access content over the Internet including apps and video chat. 
‡Applies to most home theater devices which are IR controllable.
**Requires an HDTV with HDMI input.

Vizio Tablet Review [SlashGear, Aug 6, 2011]

The Vizio Tablet is a pleasant surprise. Vizio is known more for affordable TVs and it has entered the tablet market with a similar value-oriented mindset, offering an 8-inch Android slate that delivers a well thought out consumer-centric experience along with unique features that even the most discriminating tablet enthusiasts can appreciate. It has its drawbacks, but if you’re budget-conscious and want to find your first tablet that’s the best bang for the buck, then do read on for our full review.

When it comes to the hardware specs, the Vizio Tablet isn’t going to blow your mind given its cost constraints. But, what’s there has been thoughtfully selected for the least amount of compromise. The 1GHz Marvell Armada 600 Series single-core processor [details about that in Marvell ARMADA beats Qualcomm Snapdragon, NVIDIA Tegra and Samsung/Apple Hummingbird in the SoC market [again] [Sept 23, 2010]], along with 512MB of RAM, offers enough performance power without the battery drain, but we’ll get into the benchmarks and battery life later.
[The latest information on Marvell is in First real chances for Marvell on the tablet and smartphone fronts [Aug 21, 2011]]

The VIA Plus interface brings apps to the forefront, with widget windows relegated to its own app called Widget Board. The main interface is split into two sections, one on top of the other. The first section shows all the apps in a particular category. Pressing the arrow button at the top right brings up a dropdown menu for you to select which category to display. You can add/delete categories and add/remove apps from each category. The second section shows all your apps in one place.

And, along the bottom of the screen sits a menu bar that works like a shortcut dock. There’s a total of five shortcuts that can be customized. Below is a quick video demo of the interface.

With $2.9 billion revenue last year (see: Kingston, Vizio Drive Minority-Owned Gain [July 24, 2011]) generated by only 196 employees the privately owned VIZIO Inc. is the prime example of a true 21st century consumer electronics company. No wonder why PCs and cloud clients are not parts of Hewlett-Packard’s strategy anymore [Aug 19, 2011].

Now VIZIO is showing an even better example of how to exploit the true commodity character of the recently formed Android ecosystem to expand its current HDTV business into the much wider realm of all cloud based consumer electronics devices. By doing so it is not only passing the big name CE and PC vendors by but also the typical actions of new entrants, what is represented – for example – by Huawei’s IDEOS U8150 smartphone for US$86 in Kenya: 350,000 units sold in 8 months [Aug 17, 2011].

In order to understand that let’s see first a short transcript excerpt from the second video below in order to better focus your attention on the value proposition video coming first:

[0:17] We are Gingerbread right now. We will advance to Honeycomb when we feel that the product is stable enough. [0:22] … [0:47] The other thing we’ve done also [in addition to an attractive price] we’ve done, I mean, Android is not very good at UI stuff. So you notice if you look at the TVs everything here is the same exact UI. We’ve spent a lot of time and effort on customizing the UI to make it really easy for users to navigate through Android. That is another thing when we look at Honeycomb, that they made some UI improvements but it is a lot more cluttered. So we’re doing a lot of work around that on Honeycomb project as well to make the user interface much better. [1:16]

… [4:00] This has a remote controller up on it. A universal remote controller. Not just VIZIO products, all other products … I mean home theater etc. So we have IR blaster here [built into the thin edge of the device], covers like ninety five percent of all CE [consumer electronics] products. … It is an application, a VIZIO application. [4:20] … [4:28] What is great about software based remote control is that when you pair it to your device it will only show you the keys that are for that device. [4:37]

VIZIO Tablet [VIZIO video, Aug 1, 2011]: the value proposition video from the vendor which is extremely well demonstrating not only the VIZIO-specific V.I.A. Plus UI but the whole new user experience

– [0:04] Listen to music – [0:19] Get social – [0:51] Read books – [1:10] View pictures and watch videos – [1:33] VIZIO’s Theater 3D. Leave behind the expensive battery powered glasses, the screen flicker, the darkened picture. – [1:46] Browse the web – [2:28] Control of your entertainment at your fingertips [i.e. the software based remote control] … [Watch at the end how easy is in the V.I.A. Plus user interface to switch over from your tablet to a Theater 3D TV set when viewing a 3D video on YouTube! See also the Theatre 3D related indormation further down in this post.]

Why Android will gain HUGE tablet marketshare later this year [Robert Scoble, June 15, 2011]

[0:17] We are Gingerbread right now. We will advance to Honeycomb when we feel that product is stable enough. [0:22] … [0:47] The other thing we’ve done also [in addition to an attractive price] we’ve done, I mean, Android is not very good at UI stuff. So you notice if you look at the TVs everything here is the same exact UI. We’ve spent a lot of time and effort on customizing the UI to make it really easy for users to navigate through Android. That is another thing when we look at Honeycomb, that they made some UI improvements but it is a lot more cluttered. So we’re doing a lot of work around that on Honeycomb project as well to make the user interface much better. [1:16] … [4:00] This has a remote controller up on it. A universal remote controller. Not just VIZIO products all other products … I mean home theater etc. So we have IR blaster here [built into the thin edge of the device], covers like ninety five percent of all CE [consumer electronics] products. … It is an application, a VIZIO application. [4:20] … [4:28] What is great about software based remote control is that when you pair it to your device it will only show you the keys that are for that device. [4:37]

Why is this huge? Because it doesn’t compete with iPad. At least not head on.

“What is Scoble smoking,” you are probably asking yourself.

Well, see, people who will buy an iPad will buy an iPad and won’t buy anything else. Count me in that group. I don’t care if Larry Page gave me $10,000 I’m not switching off of an iPad. At least not this year.

But, there are a whole range of uses that don’t need an iPad, but need a good tablet.

For instance, let’s say you are outfitting a school with tablets and all you need is a good web browser at a very low cost? Vizio wins here. Apple doesn’t.

Or, say you are a restaurant and need to put a tablet at every table with a menu on it? Vizio wins here. Apple doesn’t.

Or, like we just saw at Oakley’s headquarters, let’s say you are building a custom retail experience where you can order custom sunglasses. Are you going to spend $500 on an iPad when a $350 [$299, see the below press release from VIZIO]one from Vizio will do? No way. Vizio wins. Apple doesn’t.

Get it? This is how Android will take over the marketshare battle in tablets. There are more of these uses than the ones people use iPads for. After all, how many schools need tablets? A whole lot. How many custom retail establishments need tablets? A whole lot. How many manufacturing machines need tablets built into them? A whole lot.

Thanks to this single tablet I can now see how Android is going to get the market share numbers it needs to get developers excited.

But don’t call it an iPad competitor, OK? At least not until there are a ton of great tablet-based apps, which there aren’t today.

VIZIO’s New 8” Tablet Delivers Knock Out Video, Audio and App-based Entertainment at sub-$300 Price Point [VIZIO press release, Aug 8, 2011]

VIZIO’s New 8” Tablet Delivers Knock Out Video, Audio and App-based Entertainment at sub-$300 Price Point

– VIZIO Tablet to shake up the marketplace by offering intuitive tablet experience at a price point that extends availability to the masses

Unique three-speaker designdelivers stereo audio in both landscape and portrait modes

– Control Your Entire Home Theater with the VIZIO Tablet’s built-in universal remote control app

Built-in 802.11n WiFi and Bluetooth® capabilitiesoffer optimum connectivity with multiple devices

VIZIO, America’s #1 LCD HDTV company, announced today the new VIZIO 8” Tablet with WiFi is arriving at retailers nationwide. As part of VIZIO’s continued commitment to deliver great technology at a superior value, the sleek, feature-filled, Android-powered VIZIO Tablet is now available at Sam’s Club, Walmart, Costco, Amazon, and other VIZIO retailers at a breakthrough price of $299.

The VIZIO Tablet features VIZIO Internet Apps® Plus which combines the latest technologies with a unified, easy-to-use and fun user interface across select future VIZIO HDTV’s, Blu-ray® players and other devices — further differentiating the sleek VIZIO Tablet. In addition, the new Tablet is able to control nearly every element of a user’s home theater with a universal remote app and includes a built-in HDMI port with HDCP support for content protected HD playback on the big screen

By offering cutting edge technology and exceptional features at a competitive category price, the VIZIO Tablet is ideal for a wide range of users. With support for Adobe® Flash®, casual gamers, movie, TV and music enthusiastsare able to enjoy rich content and applications on the go. It also comes equipped with a unique three-speaker configuration, strategically placed for stereo sound in landscape or portrait mode.

Additionally, parents looking to entertain their children on-the-gocan quickly access the Android Market™ which gives access to hundreds of thousands of apps, including educational programs, games and eBooks.**

With back-to-school season in full swing, students will also find the sleek VIZIO Tablet an ideal and fun complement to a busy year as it makes checking email, news and social networks as simple as ever. Multiple storage options make saving assignments and downloading music a breeze with a MicroSD™ slotthat allows consumers the freedom to expand memory up to 32GB for optimal organization and entertainment.

“VIZIO set out to build an innovative tablet that breaks new ground and addresses the gaps in current offerings in the market,” said Matt McRae, Chief Technology Officer, VIZIO. “The VIZIO Tablet offers a superior multimedia experience with its three speaker design, home theater integration with IR, and a perfect size for typing, eBooks, gaming and portability. These innovations and our ground breaking price push the category forward and deliver on our brand promise of Entertainment Freedom For All.”

About VIZIO

VIZIO, Inc., “Entertainment Freedom For All™,” headquartered in Irvine, California, is America’s HDTV and Consumer Electronics Company. In 2007, VIZIO skyrocketed to the top by becoming the #1 selling brand of flat panel HDTVs in North America and became the first American brand in over a decade to lead in U.S. TV shipments. Since 2007, VIZIO LCD HDTV shipments remain in the TOP ranks in the U.S. and was #1 for the total year in both 2009 and 2010. VIZIO is committed to bringing feature-rich consumer electronics to market at a value through practical innovation. VIZIO offers a broad range of award winning consumer electronics. VIZIO’s products are found at Costco Wholesale, Sam’s Club, Walmart, Target, BJ’s Wholesale, and other retailers nationwide along with authorized online partners. VIZIO has won numerous awards including a #1 ranking in the Inc. 500 for Top Companies in Computers and Electronics, Fast Company’s 6th Most Innovative CE Company of 2009, and made the lists of Ad Age’s Hottest Brands, Good Housekeeping’s Best Big-Screens, CNET’s Editor’s Choice, PC World’s Best Buy and OC Metro’s 10 Most Trustworthy Brands among many other prestigious honors. For more information, please call 888-VIZIOCE or visit on the web at www.VIZIO.com.

VIZIO’s First Tablet Launches the VIZIO Internet Apps Plus Ecosystem, Maximizing Your Entertainment Experience with Great Picture and Sound for the Ultimate in Gaming, Video, Chat, and Value [VIZIO press release, June 28, 2011]

VIZIO Internet Apps® Plus (“V.I.A. Plus”) ecosystem delivers a unified and intuitive user experience across multiple devices, including HDTVs, Blu-ray players, tablets and more

– VIZIO Tablet features an 8 inch high-resolution capacitive touch screen, HD video playback with HDMI video output, front-facing camera for video chat, and unique 3 speaker configuration for stereo audio playback in both portrait and landscape modes

– With access to the world of Android apps, VIZIO Tablet brings a complete entertainment experience, whether playing games, watching videos, listening to music, having a video chat and much more

– 47 inch and 55 inch XVT 6 Series Theater 3D HDTVs with VIZIO Internet Apps Plus use Full Array TruLED technology for significant performance advantages over edge LED backlit sets, with superior uniformity, better off-angle viewing and deeper blacks

Irvine, CA and NY, NY (CEA Line Shows) – June 22, 2011 –- VIZIO, America’s #1 LCD HDTV Company*, announced today the upcoming release of its VIZIO Tablet, the first in the VIZIO Internet Apps® Plus (“V.I.A. Plus”) ecosystem. This next generation of VIZIO Internet Apps brings a unified, sophisticated and intuitive user experience across a wide range of CE devices that will include VIZIO HDTVs, Blu-ray players, tablets, smartphones and more. The first product to ship will be the VIZIO VTAB1008 VIZIO 8” Tablet with WiFi, arriving this summer to retail stores nationwide. Each VIZIO V.I.A. Plus product features a VIZIO-designed user interface that is not only intuitive but also consistent across screens, for superior ease-of-use for the casual, non-technical user. Built on the Android™ platform, users have the ability to access more than 400,000+ apps in the Android Market™.

Other VIZIO V.I.A. Plus products will include the XVT 6 series 47” XVT3D476SV and 55” XVT3D556SV Theater 3D HDTV’s, which deliver exceptional 3D picture quality thanks to VIZIO Theater 3D and Full Array TruLED™ technology, as well as Blu-ray players and the VIZIO Phone, its first smartphone.

The VIZIO V.I.A. Plus ecosystem represents the evolution of VIZIO Internet Apps®. This world-class connected ecosystem combines the latest technologies with a unified user interface to provide the very best HD entertainment experience – anywhere.

VIZIO V.I.A. Plus HDTVs and Blu-ray players will come with a premium Bluetooth touchpad universal remote with keyboard for full web browsing and search capabilities. With built-in 802.11n Wi-Fi, connecting the TV or Blu-ray player to the Internet is a snap. On the VIZIO Tablet, users can also take full control of their home theater with the Tablet’s universal remote control app and built-in IR blaster, which has codes for up to 95% of the remote controllable CE devices in the U.S.

“With the introduction of the VIZIO V.I.A. Plus ecosystem, VIZIO is bringing a new level of cohesiveness to the HD entertainment experience, beyond what conventional CE devices have been able to deliver in the past,” said Matthew McRae, VIZIO Chief Technology Officer. “Understanding that today’s user touches multiple devices in the course of their daily routines, we feel it’s important that the next generation of CE devices office a seamless user experience across all screens, from the living room to their handhelds. VIZIO V.I.A. Plus combines that common interface with today’s best innovative technologies for a connected experience that delivers on our promise of Entertainment Freedom for All.”

Just in time for summer fun, the VIZIO VTAB1008 8” Tablet with WiFi features a 1 GHz processor, an 8” high-resolution 1024×768 capacitive touch screen, built-in GPS and both 802.11n Wi-Fi and Bluetooth connectivity. The extended battery lasts up to 10 hoursdepending on usage. Its 2 GB of onboard storage can be easily extended with the addition of a microSD card, up to a maximum of 32 GB, for flexible storage at a fraction of the cost of other popular tablets. HD video playback is also available through its micro HDMI output, and its front-facing camera is ideal for video chats.

A Sound Approach for a Complete Entertainment Experience

A unique three-speaker design ensures users enjoy stereo audio in both portrait and landscape modes. Includes SRS TruMedia™ technology, which optimizes the audio experience on mobile devices, for enhanced audio playback and rich, natural voice communication.

VIZIO 3D Smart TVs with Full Array TruLED Picture Quality

VIZIO Internet Apps Plus also makes its entry in the emerging smart TV category with the new XVT3D476 and XVT3D556 Theater 3D HDTVs, VIZIO’s most advanced connected HDTVs yet. Their universal IR/Bluetooth remote with touchpadallow for easy web browsing, and also includes an integrated QWERTY keypad. With access to Android Market, users can find their favorite app from more than 400,000 apps currently available, and integrated Wi-Fi makes getting connected to the Internet quick and seamless.

VIZIO’s revolutionary Theater 3D technology delivers a crystal-clear, flicker-free 3D that’s up to two times brighter than current active-shutter 3DTVs, with significantly less crosstalk, a wider horizontal viewing angle and much less blurring with fast motion. Each set comes with 4 free pairs of lightweight, battery-free 3D glasses.

With VIZIO’s most advanced display technologies, these sets feature exceptional picture quality that exceeds that of the highly acclaimed XVT3SV series of HDTVs. These technologies include a TruLED display with Full Array LED backlighting and Smart Dimming, as well as 240Hz SPS™ (scenes per second) refresh rate. VIZIO Smart Dimming controls the LED levels in 160 zones, including the ability to completely turn them off to achieve a full 100% black level for an extraordinary contrast ratio. Smooth Motion technology provides sharp, blur free images with less judder, even in fast action scenes.

These new XVT3D 6 series sets will ship later this year.

*Source: IHS iSuppli Corporation Research Q2 2011 Market Tracker Report of Q1 2011 U.S. and North American LCD Market Share Shipments.

Sneak Peek at New VIZIO 3D TV – Full Scoble Interview [Robert Scoble, June 15, 2011]

Tech evangelist, Robert Scoble (@Scobleizer) interviews the VP of Product Planning about their new 3D TV.

Discover 3D (a Vizio site about Theater 3D)

Sneak Peek, VIZIO 21:9 aspect ratio TV [Robert Scoble, June 15, 2011]

Tech evangelist, Robert Scoble (@Scobleizer) checks out the upcoming Vizio 21:9 aspect ratio TV for cinema lovers.

VIZIO Brings Theater 3D™ Technology to All with a Full Lineup of Bright, Flicker-Free 3D HDTVs Including Three 21:9 Cinemawide HDTV Models [June 28, 2011]

– VIZIO announces Theater 3D HDTVs in all three product groups – E Series, M Series, XVT Series and the new 21:9 Cinemawidemodels, with screen sizes ranging from 32” to 65”

Theater 3D™ revolutionizes 3D for the home – up to 2 times brighter, virtually flicker-free picture and significantly reduced crosstalk in comparison to current Active Shutter [3D] LCD TVs

Irvine, CA and New York (CEA Line Shows) – June 22, 2011 — VIZIO, America’s #1 LCD HDTV Company*, revealed today their full line up of Theater 3D™ LCD HDTVs, including the ultra-sleek M Series models. All of VIZIO’s new 3D HDTV models use Theater 3D passive 3D technologyto achieve superior performance with a bright, crystal clear, virtually flicker-free 3D picture. Available in each of VIZIO’s product series, E, M and XVT, in screen sizes ranging from 32 to 65 inches, Theater 3D technology will be available in 11 models at a wide range of performance and price levels, making the entertainment freedom of VIZIO’s 3D technology available for all.

“We are highly encouraged by the positive response our circular polarized 3D technology has received from industry experts, the press, and Hollywood leaders like James Cameron,” said Randy Waynick, VIZIO’s Chief Sales Officer. “VIZIO’s early commitment to this direction, with its superior viewer experience, has enabled us to develop the industry’s most comprehensive range of 3D HDTVs, ranging from introductory price levels to the most advanced cinematic displays available today.”

VIZIO Theater 3D HDTVs use a revolutionary new technology to deliver crystal-clear, flicker-free 3D that’s up to 2 times brighter than current active shutter LCD TVs, with significantly less crosstalk, a wider horizontal viewing angle, and much less blurring with fast motion. Theater 3D eyewear produces far less eyestrain and headaches than active glasses, and is battery-free, lightweight and comfortable. Up to four pairs of Theater 3D glasses are provided with each set, and they are also available in a rapidly growing range of styles and colors from brand name designers. They even work in most 3D movie theaters!

“Passive polarized 3D ¬TVs will appeal to many consumers for a variety of reasons, and products at a variety of price points are possible too,” noted Insight Media President, Chris Chinnock. “By 2014, sales of passive sets will outpace shutter glasses sets, according to our forecast.”

VIZIO’s passive Theater 3D technology utilizes circular polarization, producing superior performance that results in a better viewing experience. This technology uses Polarizer Filters built into the TV, enabling viewers to use lighter and more stylish glasses instead of the bulky, heavy and uncomfortable active shutter glasses used for other 3DTVs. VIZIO’s technology team was an early champion of this approach for 3DTV, which has led to VIZIO taking a market-leading positionin the adaptation of Passive 3D technology for the home.

“DisplaySearch is forecasting that North America 3D TV shipments will increase by more than 300% in 2011 to 7M units**, driven by a range of new 3D TV types, including circular polarizer filter systems like VIZIO’s Theater 3D,” stated Paul Gagnon, Director of North America TV Market Research, DisplaySearch.

Each Theater 3D™ model supports the widest range of 3D encoding formats, ensuring compatibility with Blu-ray, broadcast, cable, satellite, and gaming sources. These formats include Frame Packing, Side-by-Side, Top and Bottom, as well as those with SENSIO® HiFi 3D and by RealD.

VIZIO Smart Dimming for Leading Picture Performance

VIZIO’s Edge-Lit Razor LED™ technology with Smart Dimming™ is featured on the M Series models and the Cinemawide 50” and 58” HDTVs. VIZIO Smart Dimming™ intelligently controls each set’s array of LEDs, which is organized in zones. Working frame by frame, based on the content being displayed, Smart Dimming adjusts brightness in precise steps down to pure black (where the LED is completely off). This cutting-edge technology minimizes light leakage and enables a Dynamic Contrast Ratio of 5 Million to 1, for blacker blacks and whiter whites.

The XVT Series models at 47” and 55” will utilize VIZIO’s Full Array TruLED™ backlighting with Smart Dimming™ technology. With over 160 zones across the entire display, TruLED backlighting is able to control specific areas of the image to a much finer degree than edge-lit sets, resulting in even better blacks and higher contrast with life-like images that “pop” off the screen.

VIZIO Internet AppsDeliver More Entertainment Freedom

All of VIZIO’s new Theater 3D models feature the VIZIO Internet Apps® (V.I.A.) Connected HDTV platform. VIZIO Internet Apps deliver unprecedented choice and control of web-based content directly to VIZIO televisions or Blu-ray players without the need for a PC or set-top box.

VIZIO’s new XVT Series models will include the next generation VIZIO V.I.A. Plus platform, which delivers a unified and intuitive user experience across multiple devices, including HDTVs, Blu-ray players, tablets and more.

Navigating VIZIO Internet Apps is simple, using the QWERTY keypad built into the included remote control (most models). State of the art wireless Internet access is available through built-in 802.11n Wi-Fi (many models with Dual Band Wi-Fi), allowing viewers to enjoy the convenience of on-demand movies, TV shows, social networking, music, photos and more with just the push of a button.

Audio for a Home Theater Experience

The stunning 3D video of the Theater 3D™ sets is matched by the latest high performance audio technologies from SRS Labs. SRS technologies help deliver an immersive, virtual, high definition surround sound through

StudioSound™ HD – the ultimate all-in-one audio suite designed specifically for flat panel TVs. Years of excellence in audio, practical experience, and patented technologies allow StudioSound HD to deliver the most immersive and natural surround sound ever using built-in TV speakers. The suite also delivers remarkably crisp and clear dialog, rich bass, an elevated soundstage and consistent, spike-free volume levels. StudioSound HD features optimized audio presets for movies, news, sports and music while also providing a built-in EQ toolset for peak audio performance.

Experience M Series Theater 3D™ at Home

VIZIO’s newest Theater 3D™ set to hit the shelves this summer is the sleek and stunning M Series. At only 1.2” thin*** (42” and 47” models. 55” model is just 1.6” thin***), this HDTV makes the most incredible technology on the market available at the best value. Not only will you have beautiful LED 2D picture quality at 42”, 46” and 55” sizes, but the latest addition of VIZIO’s Theater 3D technology to this series will make this the perfect centerpiece to any family room. Pair that with four pairs of stylish Theater 3D™ glasses and built in VIZIO Internet Apps, and make your family room the number one summer destination.

Cinemawide HDTV Ultra-Widescreen

VIZIO’s Cinemawide HDTV™, 21:9 aspect ratio TVs are the ultimate display for cinema enthusiasts. Its unique ability to display films created in the CinemaScope 2.35:1 aspect ratio on its full screen, without any black bars, means viewers will see each frame of the movie as the director intended, providing an immersive movie experience at home. On traditional HDTV models, prime screen real estate is taken up by these black bars, forcing home theater enthusiasts to stretch and zoom in. Now instead of a stretched and distorted picture, VIZIO’s Cinemawide sets ensure movie buffswill never have to miss an inch of the action.

Most HDTVs have an aspect ratio of 16:9 (sometimes called 1.78:1), with a native resolution of 1,920 x 1,080 (Full HD). This aspect ratio was selected as the ATSC HDTV standard as a compromise between television’s original aspect ratio (4:3 or 1.33:1) and the wider 1.85:1 aspect ratio selected for the many Hollywood movies. Big-budget Hollywood blockbusters, though, are usually filmed in the much wider 2.35:1 or 2.39:1 aspect ratios. VIZIO’s new Cinemawide HDTVs accommodate these “CinemaScope” or “anamorphic” aspect ratios well with a 2.37:1 (21:9) aspect ratio. So you’ll be able to watch classics and today’s best movies in the film’s original aspect ratio and without black bars.

Cinemawide HDTV also takes VIZIO Internet Apps to the next level, making its use more seamless than ever. While watching a pixel-perfect 16:9 full HD image, full size and in the correct aspect ratio on the right side of the screen, users can simultaneously browse and use VIZIO Internet Apps on the left side of the screen– with both images presented with no compromise in resolution or size.

Connected TVs are expected to account for 20% of Global TV Shipments in 2011, rising to 122 million units globally by 2014**, representing one of the most exciting areas of growth in the TV industry and ultra-wide aspect ratio TVs, such as 21:9, and will enable consumers to view their TV content and Internet content simultaneously without overlap,” stated Gagnon.

*Sources: Q3 2010 iSuppli and DisplaySearch Reports

**Report source: DisplaySearch Quarterly TV Design and Feature Report

***Depth without stand

VIZIO Continues to Expand the Beyond TV Product Portfolio, with Introduction of New Blu-ray Players, Sound Bars, Headphones, Wireless HD Kit, Advanced Media-Centric Wireless Internet Router and More [VIZIO press release, June 28, 2011]

– High-performance Home Theater Sound Bars, from the #1 manufacturer of Sound Bars, deliver exceptional sound quality with designs that complement a wide range of HDTV sizes and premium features that include wireless subwoofers

– Headphone models offer listening solutions for consumers from audiophiles to style-conscious listeners, with Active Noise-Cancelling Wireless Home Theater Headphones, Bluetooth headphones with microphone, and high-resolution earbuds for on-the-go mobility

– Wireless HD Kit provides freedom from unsightly cords by eliminating the need for any signal cables attached to the HDTV, delivering flawless performance with uncompressed audio and Full HD picture quality

– Universal Wireless HD Gigabit Internet Router connects any Wifi device to the Internet with optimization for streaming media, for a superior HD connected entertainment experience

3D Blu-ray playerswith VIZIO Internet Apps® bring the 3D experience home, with high-resolution audio and streaming access to content

-Fashionable new Theater 3D eyewear line features style and comfort, with brighter, flicker-free performance compared to Active Shutter glasses

Irvine, CA and New York, NY (CEA Line Shows) – June 23, 2011 — VIZIO, America’s #1 LCD HDTV Company*, announced today a wide range of products that provide audio, home theater and Internet streaming solutions, all part of VIZIO’s growing Beyond TV lineup. These new additional to VIZIO’s Beyond TV product portfolio represent an expansion in categories that complement VIZIO’s industry-leading LCD HDTV lineup. As the #1 manufacturer of Home Theater Sound Bars**, VIZIO will have six models available in the market with various performance levels and options to maximize your HDTV audio experience no matter the size of your home theater room. VIZIO also offers a family of headphones that should please the public, from the audiophile to the MP3 listener on-the-go, with Active Noise Cancelling Wireless Home Theater headphones, Bluetooth Stereo headphones and Sound Isolating High Performance Ear Buds. VIZIO’s Wireless HD Kit provides freedom from cords while still delivering seamless HDMI video and audio performance. The Universal Wireless HD Gigabit Internet Router prioritizes streaming media over data transmission for fewer interruptions and better performance. For those who want a comfortable, stylish alternative to bulky Active-Shutter 3D Eyewear, VIZIO offers a fashionable lineup that can be worn for Theater 3D viewing in the home and even at most movie theaters.

“Our Beyond TV products have been enthusiastically accepted by consumers, who have recognized that the high-performance value of VIZIO technology is not just limited to HDTVs,” said John Schindler, VP of Product Development at VIZIO. “Our audio products have been particularly well received, and our overall success in these new categories has helped drive our development of an ever-increasing range of accessories and even more innovative products, such as our high-performance Wireless HD Kit and Wireless HD Internet routers.”

Upgraded Audio For the Ultimate HD Experience

VHT215 Home Theater Sound Bar

Turn your room into the ultimate home theater with VIZIO’s VHT215 Home Theater Sound Bar with Wireless Subwoofer. The exceptionally thin and stylish design is the perfect compliment to match ultra-thin LED LCDs that are 40 inches or larger. Experience unsurpassed in class audio performance and connectivity options for multiple devices including two HDMI 1.4a inputs, one HDMI 1.4a output with Audio Return Channel support, and one each digital optical audio, coaxial digital audio and analog stereo inputs.

Featuring integrated wall-mount and table-stand options for easy installation in any home theater environment, the VHT215 delivers simplicity of use with VIZIO’s acclaimed ergonomic home theater remote control and new front panel display that can easily communicate volume and input status with the press of a button. The VHT215’s wireless capability enables freedom to place the powerful subwoofer conveniently in the room, as well as the ability to connect with any of VIZIO’s Wireless HD Audio products, including Home Theater Headphones. With no physical connection, uncompressed high definition audio is transmitted between devices at distance up to 60 feet. Available in August 2011, SRP is $329.

VSB205 Home Theater Sound Bar

Perfect for HDTVs sized 32 inches and larger, the VSB205 Home Theater Sound Bar is an excellent upgrade. Featuring SRS WOW HD audio processing, which produces rich, natural bass, with incredible high-frequency definition and clarity, the Sound Bar brings powerful sound to any home theater with dual 2¾ inch drivers for each channel.

Dual analog audio inputs (both RCA and mini 3.5mm) allow for easy one-cable connection from any TV. The Sound Bar can be either table or wall mounted with included hardware, making for a compact fit. The VSB205 is currently available at an SRP of $119.

VHT510 5.1 Channel Surround Sound Home Theater with Wireless Subwoofer

A complete 5.1 channel surround sound solution, the acclaimed VHT510 Surround Sound Home Theater Speaker System creates the ultimate in class home theater experience. This powerful yet compact Sound Bar is ideal for HDTVs 40 inches or larger. Achieve high-definition sound from the left, center and right speakers that reside in this Sound Bar, with surround channel playback from two satellite speakers and impactful low bass produced by its wireless 6.5 inch long-throw subwoofer. This VIZIO premium surround sound system supports Dolby Digital®, DTS, SRS StudioSound HD™ and SRS TruVolume™, providing listeners a truly immersive audio experience, whether listening to music, watching television or viewing movies on Blu-ray disc.

Reducing the need for unsightly wires, the subwoofer uses Wireless HD Audio™ 2.4 GHz technology to allow convenient placement of the speaker in the home theater. The Sound Bar can send High Definition quality audio to other Wireless HD Audio compatible devices like VIZIO Home Theater Wireless Headphones. With a built-in amplifier and audio receiver, this 5.1 channel system completes any home theater with all-in-one convenience. The VHT510 has a SRP of $389 and is in stores now.

XVTHP200 Home Theater Headphones with Wireless Dock for iPod

Experience unparallel sound with VIZIO’s Active Noise Cancellation High Definition Home Theater Headphones. The audiophile’s choice, these headphones provide true lossless audio for maximum quality from a convenient wireless or wired connection. Professionally-tuned 40mm Neodymium drivers with integrated Dolby Digital, SRS TruSurround™ and SRS TruVolume™, enhance both stereo and surround audio sources ensuring that even the most demanding listeners will be pleased.

The base station with dock for iPod lets users enjoy the freedom of listening to music on their iPod. Part of VIZIO’s Wireless HD Audio Ecosystem, the Home Theater Headphones work together with your VIZIO Sound Bar (VHT models) to automatically re-direct sound to the activated headphones. For folks on-the-go, VIZIO’s Active Noise Cancellation reduces background noises, helping listeners to relax and lose themselves in rich, natural sound. With a standard 3.5mm audio cable option, a built-in long-life rechargeable Lithium polymer battery, and a sleek fold and go design, the headphones are perfect for travel. For convenience, the headphones can be charged from the base station or through the provided mini-USB cable. Available now, SRP for the headphones is $309.99.

XVTHB100 Bluetooth Headphones

With VIZIO’s XVTHB100 Bluetooth Stereo Headphones, superb audio quality for wireless music listening is just the beginning. Using Bluetooth and a built-in microphone, the headphones can connect to a laptop, mobile phone and even a VIZIO Internet Apps-enabled HDTV for telephone and video calling. Answering calls, even while listening to music, is handled with a single pushbutton click.

High-performance 30mm Neodymium drivers take full advantage of advanced SRS sound processing to produce a rich, immersive audio listening environment. A lightweight, adjustable over-the-ear headband design makes the headphones comfortable even for extended listening sessions and telephone conversations. Rechargeable with up to 9 hours of talk time, these headphones are the perfect all-in-one source for work, play, and travel. Currently available, SRP is $99.99.

VHE211K and VHE211W Sound Isolating High Performance Earbuds with built-in Microphone

VIZIO’s Sound Isolating High Performance earbuds with built-in microphone are perfect for on-the-go entertainment and hands-free calls. Use them with the new VIZIO Tablet, your mobile phone, or use them for video calls for superior sound quality and sound isolation to keep out distracting ambient noise. While ordinary earbuds use ceramic magnet drives, VIZIO utilizes 9mm rare-earth Neodymium dynamic drivers that are professionally tuned to produce crisp, accurate audio with powerful bass. Listeners will find themselves rediscovering their music collections, hearing notes as they were meant to be heard.

Further improving on conventional earbuds, the VIZIO Sound Isolating High Performance earbuds are designed to insert easily and comfortably into the ear canal. Ergonomic silicone ear cushions create a tight seal within the ear, minimizing background noises and ensuring that every sonic nuance can be heard. Three pairs of in-ear cushions are provided for an optimum fit to any ear, making for a comfortable, personalized fit and exceptional low-frequency performance. Listeners that have used other earbuds will also appreciate VIZIO’s high-quality flat, tangle-resistant design that keeps the earbuds tangle to a minimum, especially important for active listeners. VIZIO’s Sound Isolating High Performance Earbuds will be available in Summer 2011 in both white and black, at an SRP of $29.99. The model number for the White version is VHE211W, and the Black version designation is VHE211K.

Stay Connected with Wireless HD Options

XWH200 Universal Wireless HD Video and Audio Kit

The XWH200 Universal Wireless HD Video and Audio Kit fulfills the longstanding dream of many HDTV owners – the elimination of signal cables connected to the set. The XWH200 transmits uncompressed full HD video and audio wirelessly to the HDTV. With no software required, up to four HDMI source components, whether they be set-top boxes, Blu-ray players or game consoles, can be connected to the remote controllable transmitter, which then sends the desired HD source wirelessly to the TV.

Compliant with the WirelessHD™ 1.0 standard, the XWH200 operates at the 60 GHz frequency and is able to handle up to 4 Gbps of data, more than enough for 1080p Full HD and 3D. Unlike other products on the market, it does not interfere with existing wireless networks, and it’s compatible with any HDMI source including game consoles, cable/satellite boxes, Blu-ray disc players, digital media receivers and more.

Users can now hide their A/V equipment away in a cabinet or other discrete location in the room, separate from the HDTV, which can now be the visual centerpiece of the home theater, floating clean on the wall as the customer has always envisioned. The XWH200 has an SRP of $229.99 and is available now.

XWR200 High Performance Universal Wireless HD Gigabit Internet Router

Following the rapid success and press acclaim for the XWR100 Router, VIZIO introduces an even higher level of Internet router performance with the XWR200. This Dual-Band Internet router operates in both the 2.4 and 5 GHz bands to allow data transmission in the lower band while streaming media in its higher frequency band.

With higher wireless transmission speeds up to 450 + 300 Mbps, media streaming is faster than ever, and its Gigabit Ethernet capability lets media intense apps or large files function at full capacity without being limited by the network bandwidth. For use in larger homes where wireless signals may be difficult to receive away from the router, the XWR200 features additional wireless power amplifiers, and adds a third antenna for the 5 GHz band. The XWR200 is expected to hit stores in first half 2012.

Experience Unparallel Video Playback with VIZIO Blu-ray Players and Theater 3D

VBR133 3D Blu-ray Player With VIZIO Internet Apps

The VBR133 3D Blu-ray Player brings the same stunning 3D and 2D picture quality and exceptional lossless surround sound and a powerful suite of streaming entertainment services. 1080p Full HD picture quality in 2D and 3D quality and both Dolby TrueHD and DTS HD audio technologies ensure the ultimate in audio and video performance. With access to VIZIO Internet Apps through a wired Ethernet connection, content from top online services like VUDU™, Netflix, HuluPlus™, Amazon Video On Demand, YouTube, Pandora and more is at the user’s fingertips, with instant access to an almost unlimited library of online movies, music and more. This player brings entertainment freedom and a premium home theater experience to any room. The VBR133 has an SRP of $109.99 and is in stores now.

VBR122 Blu-ray Player With Wireless VIZIO Internet Apps

The VBR122 Blu-ray Player brings stunning picture quality, exceptional lossless surround sound and a powerful suite of wireless streaming entertainment services. With access to VIZIO Internet Apps through an integrated WiFi connection, content from top online services like VUDU™, Netflix, HuluPlus™, Amazon Video On Demand, YouTube, Pandora and more is at the user’s fingertips, with instant access to an almost unlimited library of online movies, music and more. What’s more, the VBR122 delivers an industry-leading ergonomic remote control with an integrated full QWERTY keyboard to allow fast and easy searching for favorite movies, shows, actors, songs and more on the many available entertainment services. 1080p Full HD picture quality and both Dolby TrueHD and DTS HD audio technologies ensure the ultimate in audio and video performance. This player brings entertainment freedom and a premium home theater experience to any room. The VBR122 has an SRP of $119.99 and is in stores now.

Theater 3D Eyewear Line

VIZIO’s new line of Theater 3D eyewear is the stylish and comfortable complement to Theater 3D HDTVs. By utilizing a circular polarized 3D filter, Theater 3D moves the burden of 3D processing into the TV, allowing the Theater 3D eyewear to be free of the batteries and shutter mechanisms inherent in Active Shutter 3D TVs. In fact, Theater 3D eyewear can be used to view 3D movies in a majority of movie theaters.

Besides using more comfortable eyewear, Theater 3D offers several performance advantages over conventional Active 3D systems. Theater 3D is up to 2X brighter, has significantly less crosstalk in comparison to current Active Shutter LCD TVs, handles fast motion with less blurring, has a wider horizontal viewing angle, and eliminates the annoying flicker of Active Shutter 3D systems that often causes eye strain.

The XPG201/202 glasses feature an attractive design with curved lenses for more comfortable viewing, premium quality optical lenses for best in class 3D experience and a high quality, durable frame. Both the XPG201 single pack and the XPG202 2-pack are available this month.

*Source: IHS iSuppli Corporation Research Q2 2011 Market Tracker Report of Q1 2011.
**Source: CEA’s Q1 2011 MarketMetrics Data
# # #

Source: VIZIO, Inc.

VIZIO Unveils New Smartphone and Tablet Featuring VIA Plus for Even More Entertainment Freedom [VIZIO press release, Jan 3, 2011]

Irvine, CA—January 3, 2011 — VIZIO, America’s #1 LCD HDTV Company*, announced today it is expanding into the mobility category with the VIZIO smartphone and tablet (referred to as the “VIA Phone” and “VIA Tablet” below) — both part of the VIA Plus ecosystem, the next generation of VIZIO Internet Apps™, that features a unified, sophisticated and intuitive user experience across multiple CE devices including VIZIO HDTVs, Blu-ray players, smartphones and tablets.

“Both the VIA phone and tablet feature the highest performance coupled with innovative features that tie them into the media consumption experience,” said Matthew McRae, Chief Technology Officer at VIZIO. “And by integrating the VIA Plus user experience also found on our next generation TVs and Blu-ray devices, VIZIO is delivering the multi-screen, unified ecosystem others have talked about for years and never delivered.”

The VIZIO VIA Phone features a 1 GHz processor, 4” high-resolution capacitive touch screen, 802.11n Wi-Fi and Bluetooth connectivity, GPS, a MicroSD card slot for memory expansion and HDMI output with HD video playback. It also features a front-facing camera for video chats and a 5 megapixel rear camera for photos and HD video capture.

The VIZIO VIA Tablet also features a 1 GHz processor, with an 8” high-resolution capacitive touch screen, 802.11n Wi-Fi and Bluetooth connectivity, GPS, a MicroSD card slot for additional memory expansion, HDMI output with HD video playback, and a front-facing camera for video chats. It also boasts a unique three-speaker design for stereo audio in both portrait and landscape modes.

Both devices include a built-in IR blaster with universal remote control appfor quick access to the entire home theater or nearly any other CE device in the home. Both run on the Android™ Platform, which will also allow users to access thousands of apps through Android Market™.

“As part of the VIA Plus ecosystem, the VIA phone and tablet are natural extensions of the HD entertainment experience that historically has centered around the TV,” added Mr. McRae. “Whether consumers are looking to enjoy content on the big screen, on their tablet or on a mobile phone, VIA Plus delivers on the promise of Entertainment Freedom for All by creating a rich and consistent user experience across all devices that’s accessible to everyone, from the power user to the casual browser.”

VIZIO will be demonstrating the VIA Phone and VIA Tablet in their private CES showcase at the Wynn Hotel from January 6 to 9, 2011.

*Sources: Q3 2010 iSuppli and DisplaySearch Reports

Important details from ABOUT VIZIO [page on vizio.com]:

VIZIO, Inc. was founded in 2002 by William Wang with the idea that everyone deserves to own the latest technology. Mr. Wang’s first two employees, Laynie Newsome and Ken Lowe, were honored as co-founders and eight years later are still hard at work taking entertainment freedom by storm! By providing a myriad of high definition entertainment options and unmatchable value, VIZIO has grown to over 160 employees and remains the first American brand in over a decade to lead in U.S. LCD HDTV sales.

VIZIO’s uncompromised technology and incredible value has continued to make us America’s Best Selling LED LCD HDTV and the industry leader in sales growth through the 2nd quarter of 2010,* as well as the Highest Rated LCD HDTV of 2010.** VIZIO’s lineup can provide an even greater value with our efficient LED backlit TVs that exceed current ENERGY STAR® 4.1 Guidelines by at least 15%***. So whether you are looking for entertainment essentials with our E Series, sleek design with the M Series, or ultimate performance with the XVT Series, VIZIO has the perfect solution to exceed all of your entertainment needs. Combined with 3D, VIZIO Internet Apps™, Wireless HD Audio, full array TruLED™ and edge lit Razor LED™ displays, we truly give you the freedom to fearlessly expand your entertainment world.

VIZIO Timeline:

2002
* Founded in October of 2002 under the name V, Inc.
* With a total of 3 employees, they provided consulting services to Gateway, Inc.

2003
* Launched the VIZIO brand
* Launched Plasma monitor and DVD up-convert line at CES
* VIZIO signed on with Costco Wholesale to sell VIZIO products
* Total of 5 employees

2004
* VIZIO expanded their product offerings to include LCDs, Plasmas, DVD and DLP
* Total of 25 employees

2005
* VIZIO’s 50” Plasma was ranked CNETs Top Holiday Tech gift
* VIZIO signed on with Sam’s Club to sell VIZIO products
* Grew to 41 employees

2006

* Total of 62 employees
* Shipped a total of 750,000 HDTVs

2007

* Grew to 85 employees
* Shipped a total of 2,900,000 HDTVs

2008

* Total of 100 employees
* Shipped a total of 3,500,000 HDTVs
* Total revenue exceeds 2 Billion Dollars

2009
* VIZIO continues to add new innovative products to their portfolio such as Blu-ray® players, Home Theater Sound Bars with Wireless Sub, Motorized Wall Mounts and more.
* VIZIO launches 40 new HDTV models with sizes ranging from 19” to 55” and including the top technologies such as VIZIO Internet Apps their version of the internet connected TV, 240Hz LCD models and the latest TruLED technology which delivers the ultimate HD experience with less impact on our planet.

* VIZIO HDTVs can be found on more store shelves than SONY in July 2009
* Over 160 employees

2010
*As CEA member, VIZIO¹s first CES booth promoted their VIZIO Internet Apps™ connected HDTVs and key platform partners Yahoo!, Twitter, vudu, & Facebook
*2010 CES announcements included eleven categories in addition to TVs including High Definition Blu-ray DVD Players™, wireless HD Internet routers and VIZIO Internet Apps™ enabled entertainment systems, HD home theater sound, HD Personal Home Theater headphones, and portable razor thin LED LCD HDTVs.

*196 employees total (includes 76 South Dakota and 3 international)

Beyond 2010 and well into the future:
VIZIO has made great strides in providing Entertainment Freedom For All™ and will continue to build this principle through 2011. With the explosion of 3D TV, we currently have many exciting new developments to reveal at the Consumer Electronics Show and throughout the upcoming year. While staying true to our roots in vision and value, VIZIO is excited to continue and grow our brand within the U.S. and beyond. VIZIO: Taking entertainment freedom by storm!

* Based on iSuppli US LCD-TV Unit Shipments Market Share Q2, 2010
**HDTV Magazine and CNET Reviews
***While TV is on

Consumers Make VIZIO the #1 LCD HDTV in North America [VIZIO press release, Feb 23, 2011]

Consumers Make VIZIO the #1 LCD HDTV in North America

  • VIZIO #1 in US LCD HDTV for the full 2010 year with over 21% market share
  • VIZIO’s share for Q4 US LCD HDTVs was 28%– the highest share any brand in the industry has achieved since 2004
  • VIZIO led the top brands in the industry with 55% Y/Y LCD HDTV sales growth, continuing to increase their leadership role over the competition based upon consumer preference and choice
  • VIZIO secures 3 spots in the top 5 Best Sellers including a popular big screen 42” model

IRVINE, CA – FEBRUARY 24, 2011— VIZIO, Inc. America’s #1 LCD HDTV Company, announced today that it outperformed the industry as the number one shipper of all flat panel HDTVs in Q4 2010 for both North America and the U.S. With an LCD HDTV share of more than 28%* VIZIO has captured the important essence of consumer desires in flat panel HDTV performance features, design form and value.

VIZIO saw significant sales increases with its 7-time award winning XVT Series lineup with VIZIO Internet Apps®, as well as in the Beyond TV category, headlined by Blu-ray players with wireless Internet apps and the nation’s bestselling Soundbars. VIZIO was also the leading shipper of LED backlit HDTVs in North America in Q4** behind the strength of its TruLED and Razor LED products shipping over 50% more backlit LED LCD TVs than its nearest competitor.

“VIZIO continues to defy conventional wisdom in the consumer electronics space with strong growth and innovation. Our team’s success has proven that consumers recognize great technology at a great price by unseating the industry’s traditional leaders in the LCD market,” stated Randy Waynick, Chief Sales Officer, of VIZIO. “Customers have embraced our higher performance product lineup and efficient retail partners in TVs and have now carried over their brand loyalty to our Beyond TV products, making VIZIO’s soundbars and Blu-ray players best sellers as well. Stay tuned in 2011 as we extend our “Entertainment Freedom for All” brand vision to Theater 3D HDTVs, tablets and smartphones.”

Adding to the meteoric growth of the brand, VIZIO’s Beyond TV Category, which includes soundbars, Blu-ray players, Headphones, Wall mounts, Cables, Wireless Routers, and other accessories, saw tremendous increases in Q4. Market-leading Soundbars saw sales growth of 200% Q/Q while sales of VIZIO’s popular Blu-ray players grew 163% representing 10% of the market***. Offering a wide range of Soundbar solutions with innovative wireless subwoofers in 5.1 and 2.1 channel configurations and sizes for small to large size televisions has allowed VIZIO to dominate this market — capturing 54% of the growing market in Q4 based on CEA’s MarketMetrics data.

VIZIO has also become a leader in some key advanced TV categories, rising to #1 in LED LCD TV unit shipments in North America and was #2 in high frame rate LCD and 40”+ screen size,” stated Paul Gagnon, Director of North American TV Research at DisplaySearch.

DisplaySearch: Top 10 LCD TV Brands in North America for the Year of 2010 (Ranking by Unit Shipments in Thousands)

Rank Vendor 2010 Market Share 2009 Y/Y% Change
1 VIZIO 6,962 18.2% 5,941 17%
2 Samsung 6,715 17.5% 6,418 5%
3 Funai 4,613 12.0% 4,758 -3%
4 Sony 3,998 10.4% 4,338 -8%
5 LG 3,711 9.7% 2,704 37%
6 Toshiba 2,274 5.9% 2,635 -14%
7 Sanyo 2,250 5.9% 2,106 7%
8 Sharp 1,243 3.2% 1,770 -30%
9 Panasonic 1,035 2.7% 889 16%
10 Westinghouse 476 1.2% 386 -1%

Source: DisplaySearch February 2011

The fourth quarter’s results showed that consumers are looking for innovation as well as value for their HDTV purchases. Outpacing the industry, VIZIO LED HDTV shipments grew 993% Y/Y, Full HD LCD TVs grew 44% Y/Y, 46” and above TVs grew 92% Y/Y and 120Hz+ TVs grew 119% Y/Y***.

“U.S. consumers are demanding full-featured LCD TVs at the lowest possible prices,” said Riddhi Patel, Director, Television Systems, for IHS. “Television brands that successfully offer a combination of low pricing and advanced features, such as LED backlighting, Internet connectivity are gaining market share. Because of VIZIO’s ability to provide latest features at attractive prices, the brand has reached number 1 position in the US flat panel TV market in Q4 2010.”

iSuppli: Top 8 LCD-TV Brands in the United States for the Year of 2010
(Ranking by Unit Shipments in Thousands)

Rank Vendor 2010 Market Share 2009 Y/Y% Change
1 VIZIO 6,929 21.3% 5,920 17%
2 Samsung 6,123 18.9% 5,608 9%
3 Sony 3,373 10.4% 3,681 -8%
4 LG 2,865 8.8% 2,533 13%
5 Toshiba 2,092 6.4% 2,394 -13%
6 Sanyo 1,978 6.1% 1,934 2%
7 Sharp 1,082 3.3% 1,592 -32%
8 Panasonic 963 3.0% 1,183 -19%
Total 32,459 32,324 0%

Source: iSuppli Corp. February 2011

iSuppli: Top 8 All Flat Panel Brands in the United States for Q4 2010
(Ranking by Unit Shipments in Thousands)

Rank Vendor Q4 2010 Q4 2009 Y/Y% Change Q3 2010 Q/Q % Change
1 VIZIO 2,867 1,844 55% 1,602 79%
2 Samsung 2,572 2,095 23% 1,817 42%
3 LG 1,247 1,048 19% 1,025 22%
4 Sony 1,049 1,318 -20% 796 32%
5 Panasonic 793 657 21% 812 -2%
6 Toshiba 708 708 0% 533 33%
7 Sanyo 522 443 18% 651 -20%
8 Sharp 264 317 -17% 380 -31%
Total 11,978 11,299 6% 9,699 23%

Source: iSuppli Corp. February 2011

Further displaying VIZIO’s growing popularity for the family’s main living room TV is Quixel Research’s Q4 list of the Top 5 Best Selling models in the US LCD TV market. One of VIZIO’s 40”+ LCD TV models was both the largest and the highest priced among those ranked in the top five best sellers for the quarter.

Quixel Research Market Update – Q4 2010
Top 5 Best Sellers by Units

Manu-
facturer
Product Size Resolution Tech List Price
Samsung LN32C350 32″ HD 720 LCD $499.00
VIZIO E320VL 32″ HD 720 LCD $469.99
VIZIO M260VA 26″ HD 720 LCD $399.99
VIZIO E420VO 42″ HD 1080 LCD $663.99
Samsung LN40C500
F3FXZA
40″ HD 720 LCD $559.00

“VIZIO has become the brand to purchase for newest technology such as LED and Internet connected HDTV as well as their larger main living room TVs where they get the latest features at prices that allow them to step up to the next generation of entertainment,” stated Tamaryn Pratt, Analyst at Quixel Research.

*Source: iSuppli Research Q1 2011 Report of Q4 2010 US LCD Market Share
** Source: DisplaySearch Quarterly Advanced Global TV Shipment and Forecast Report
***Source: VIZIO, Inc.

PCs and cloud clients are not parts of Hewlett-Packard’s strategy anymore

Updates: – HP Names Bill Veghte Chief Strategy Officer [Jan. 17, 2012]

In addition to his new responsibilities, Veghte will continue in his current role as executive vice president of HP Software.

As chief strategy officer, Veghte will be responsible for keeping HP on the cutting edge of innovation. He will work with HP’s senior business and technology leaders to help define the IT industry’s future and make certain HP continues to lead the way. Veghte’s new role reaffirms HP’s commitment to providing customers with the latest platforms, products and services needed for success in a rapidly changing world.

“Every 10 to 15 years, fundamental shifts occur in the IT industry that redefine how technology is delivered,” said Meg Whitman, HP president and chief executive officer. “From mainframes to client/server to the internet, companies that identified the opportunity first and developed the right strategy came out on top. As we move forward, HP intends to stay on top, and I believe Bill has the knowledge and vision to keep us there.”

In addition to helping drive strategy for the company as a whole, Veghte will lead HP’s cloud and webOS open source initiatives.

HP chief aims for software revenue leap: report [Reuters, Dec 1, 2011]

Hewlett-Packard wants to see a jump in revenues from its software business, the company’s chief executive told German newspaper Frankfurter Allgemeine Zeitung.

“I want to double or triple our current revenue in software from the current level of $5 billion,” Chief Executive Meg Whitman said, without giving a timeline.

Whitman, who was appointed in September to replace Leo Apotheker, said the company had not made a decision on the future of its Palm webOS mobile software platform.

“It is complicated,” she was quoted as saying when asked about the future of the unit. “We need a good decision, not a quick one.”

Last month sources told Reuters Hewlett-Packard is looking to sell Palm’s webOS mobile software platform. The deal could fetch hundreds of millions of dollars but less than the $1.2 billion that HP paid last year.

Former eBay CEO Whitman defended the $12 billion acquisition of British software firm Autonomy, which was closed in October.

The deal, which was the centerpiece of a botched strategy shift that cost ex-chief executive Apotheker his job, was “a good acquisition,” Whitman told the paper, in an interview published on Thursday.

“Autonomy has potential and we can turn it into a fast-growing unit,” she said.

HP Reports Fourth Quarter and Full Year 2011 Results [Nov 21, 2011]


Fourth fiscal quarter 2011 business group results

  • Services revenue of $9.3 billion grew 2% year over year with a 12.8% operating margin. Technology Services and Application Services revenue grew 3% and 2%, respectively, while IT Outsourcing revenue grew 1% and Business Process Outsourcing revenue declined 2%.
  • Enterprise Servers, Storage and Networking (ESSN) revenue declined 4% year over year with a 13.0% operating margin. Networking revenue was up 5%, Industry Standard Servers revenue was down 4%, Business Critical Systems revenue was down 23%, and Storage revenue was up 4%.
  • HP Software revenue grew 28% year over year with a 27.7% operating margin. HP Software revenue was driven by revenue growth in licenses and services of 33% and 36%, respectively.
  • Personal Systems Group (PSG) revenue declined 2% year over year with a 5.7% operating margin. Commercial client revenue grew 5%, and Consumer client revenue declined 9%. Total units were up 2% with 5% growth in desktop units and 1% growth in notebook units.
  • Imaging and Printing Group (IPG) revenue declined 10% year over year with a 12.8% operating margin. Commercial revenue was up 4% year over year with commercial printer hardware units up 5%. Consumer printer hardware revenue was down 8% year over year with an 8% decline in units.
  • Financial Services revenue grew 18% year over year driven by double-digit growth in both lease volume and portfolio assets. The business delivered a 10.3% operating margin.

HP Software Division (Wikipedia)
HP Appoints Bill Veghte to Lead HP Software and Solutions Business [May 5, 2010]

Veghte will lead the $3.6 billion business unit, which includes a number of industry-leading offerings:

  • IT Management: helps clients improve efficiency and optimize investments with a broad range of management software that spans technology infrastructure, services and operations;
  • Information Management: transforms information for better business insight by automating the search, management and retention of information across an enterprise;
  • Business Intelligence: helps clients gain competitive advantage and create new business opportunities with solutions that connect intelligence across an enterprise; and
  • Communications and Media: enables service providers to transform their communications service portfolios and achieve operational excellence.

Veghte joins HP from Microsoft, where he most recently served as senior vice president for the $15 billion Windows business and where he was instrumental in the delivery and launch of Windows® 7.

Autonomy Unveils Next-Generation Information Platform Built for “Human Information” Era [Nov 29, 2011]

Autonomy IDOL 10 Delivers Real-Time Contextual Understanding of Structured and Unstructured Data

 Autonomy, an HP Company, today announced a groundbreaking information platform, Autonomy IDOL 10, designed to help organizations understand and process 100 percent of enterprise information in real time.

IDOL 10 provides a single processing layer that enables organizations to extract meaning and act on all forms of information, including audio, video, social media, email and web content, as well as structured data such as customer transaction logs and machine-based sensor data.

The platform combines Autonomy’s infrastructure software for automatically processing and understanding unstructured data with the high-performance real-time analytics engine for extreme structured data from Vertica, an HP Company.
[The Vertica Analytics Platform is a data warehouse software for storing and analyzing structured data, or data that has been stored in a relational database.]

From the start of the IT industry until today, humans have had to adapt information to fit the machine, and data was organized into rows and columns, a process which relied on people understanding and manually classifying data. Computers could not understand the complexity of human interactions.

However, people do not speak in zeroes and ones, but have complex language and idioms, send photographs and videos, and communicate via social media – all of which traditional databases cannot process. The challenge for the modern enterprise is to understand and extract the value from this rich sea of Human Information, which accounts for 85 percent of all corporate data, including emails, audio, video, social networking, blogs, call-center conversations, closed circuit TV footage, and more.

Today, the combination of Vertica’s high-speed analytics platform with Autonomy’s IDOL technology marks a fundamental shift in our ability to process this volume of data. We are at an historical moment when it is the “I” in Information technology that is changing. Autonomy provides solutions that understand the full spectrum of enterprise information, both human and structured information, and recognize the relationships that exist within it.
[Autonomy’s IDOL (Intelligent Data Operating Layer) server can index unstructured data within an enterprise, providing users with a search-based interface.]

By enabling computers to understand the shades of grey in the world, rather than simply the black and white found in databases, Autonomy Information Management allows businesses to automate key processes and improve an organization’s efficiency.

For far too long, organizations have confined structured data to relational databases and unstructured data to simplistic keyword matching technologies,” said Mike Lynch, executive vice president, Information Management, HP. “IDOL 10 brings these worlds together, allowing organizations to automatically process, understand, and act on 100 percent of their data, in real-time. The results will be dramatic, as businesses can develop entirely new applications that explore the richness and color of Human Information that live in unstructured, semi-structured, and structured forms.”

Platform built for the Human Information Era – IDOL 10 features:

  • A single processing layer for forming a conceptual, contextual and real-time understanding of all forms of data, both inside and outside an enterprise.
  • A combination of Autonomy’s infrastructure software for automatically processing and understanding unstructured data with Vertica’s high-performance real-time analytics engine for extreme structured data.
  • Unique pattern-matching technologies, powered by an analytics engine based on statistical algorithms that recognize distance in ideas as well as concepts and context in real time.
  • Five new solution sets – HP Big Data Solutions, HP Social Media Solutions, HP Risk Management Solutions, HP Cloud Solutions and HP Mobility Solutions.
  • “Manage-in-place” technology, which forms an index of all forms of data, allowing information to reside in its original location. This eliminates the need for making copies of data, reducing storage hardware costs and removing the need for risky and inefficient transfers of data.
  • NoSQL interface that provides a single processing layer to perform cross-channel analytics that understands both structured and unstructured data.
  • The Vertica Analytics Platform, which includes enhanced native in-database analytics, including new capabilities for geospatial, event-series pattern matching, event-series joins, and advanced aggregate statistical and regression analytics.
  • Vertica’s real-time analytics for real-world applications delivers performance enhancements throughout the Vertica Analytics Platform in areas such as subqueries, database statistics, life cycle management, query optimization, data re-segmentation and join filtering.
  • Enhanced elasticity features that enable dynamic expansion and contraction of clusters more than 20 times faster in every deployment scenario – cloud, virtual and physical – allowing users to quickly create additional capacity as needed.

HP Information Optimization is a core component of an Instant-On Enterprise. In a world of continuous connectivity, the Instant-On Enterprise embeds technology in everything it does to serve customers, employees, partners and citizens with whatever they need, instantly.

Availability

IDOL 10 is scheduled to be available worldwide on Dec. 1, 2011.Please visit http://idol.autonomy.com/to learn more about Autonomy IDOL 10.About Autonomy

Autonomy Corporation, an HP Company, is a global leader in software that processes human information, or unstructured data, including social media, email, video, audio, text, web pages and more, enabling companies to leverage their data assets.About HP

HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world’s largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP (NYSE: HPQ) is available at http://www.hp.com/.

Michael Lynch [Nov 14, 2011]
Executive Vice President, Information Management
Founder and Chief Executive Officer, Autonomy
Hewlett-Packard Company

Michael Lynch is executive vice president of Information Management at HP and founder and chief executive officer of Autonomy, an HP subsidiary. He oversees engineering, sales and marketing associated with HP’s Information Management portfolio including Vertica and Autonomy. He is also a member of the company’s executive council.

Under Lynch, Autonomy became the pioneering leader in analyzing unstructured, or human-friendly, information from which companies can extract meaning from all data in whatever format it is in, whether email, voicemail, social media, text messages or web pages.

HP Completes Acquisition of Vertica Systems, Inc. [March 22, 2011]

The acquisition, initially announced in February, will provide customers with a powerful solution for managing big data, especially when considering the volume and types of data generated by businesses in today’s information economy. Vertica’s real-time analytics platform has the ability to concurrently load and analyze data, allowing customers to turn information into insight and a competitive advantage at the speed of business.

The close of the deal builds on HP’s strategic focus on cloud and connectivity, and will enhance the company’s capabilities for information optimization by adding sophisticated, real-time business analytics for large and complex sets of data in physical, virtual and cloud environments.

HP to Keep PC Division [HP press release, Oct 27, 2011]

Continued combination of HP and its Personal Systems Group expected to deliver greater customer and shareholder value

HP today announced that it has completed its evaluation of strategic alternatives for its Personal Systems Group (PSG) and has decided the unit will remain part of the company.“HP objectively evaluated the strategic, financial and operational impact of spinning off PSG. It’s clear after our analysis that keeping PSG within HP is right for customers and partners, right for shareholders, and right for employees,” said Meg Whitman, HP president and chief executive officer. “HP is committed to PSG, and together we are stronger.”

The strategic review involved subject matter experts from across the businesses and functions. The data-driven evaluation revealed the depth of the integration that has occurred across key operations such as supply chain, IT and procurement. It also detailed the significant extent to which PSG contributes to HP’s solutions portfolio and overall brand value. Finally, it also showed that the cost to recreate these in a standalone company outweighed any benefits of separation.

The outcome of this exercise reaffirms HP’s model and the value for its customers and shareholders. PSG is a key component of HP’s strategy to deliver higher value, lasting relationships with consumers, small- and medium-sized businesses and enterprise customers. The HP board of directors is confident that PSG can drive profitable growth as part of the larger entity and accelerate solutions from other parts of HP’s business.

PSG has a history of innovation and technological leadership as well as an established record of industry-leading profitability. It is the No. 1 manufacturer of personal computers in the world with revenues totaling $40.7 billion for fiscal year 2010.

“As part of HP, PSG will continue to give customers and partners the advantages of product innovation and global scale across the industry’s broadest portfolio of PCs, workstations and more,” said Todd Bradley, executive vice president, Personal Systems Group, HP. “We intend to make the leading PC business in the world even better.”

More information is available at www.hp.com/investor/PSG-Decision.

HPQ – Hewlett Packard Co PSG Decision – Conference Call [Oct 17, 2011]

Bill Shope – Goldman Sachs – Analyst
Okay, great.Thanks, guys. In light of this decision, can you give us an update on how you’re thinking about your tablet market strategy, both near term and longer term?

Todd Bradley – Hewlett Packard Co. – EVP, Personal Systems Group

Well Bill, this is Todd. That thinking hasn’t changed.We’re continuing to focus on a Microsoft-based– the tablet that we have and the ones that will develop on Windows 8. I think from a webOS perspective, that’s kind of the next piece of work to complete. I know Meg and I are working, Meg, the whole team of Meg, Cathie, myself, Jon Rubinstein working very, very hard and as quickly as we can to make the right decisions about that product.

Meg Whitman – Hewlett Packard Co. – President and CEO

Let me just add, I think we need to be in the tablet business, and we are certainly going to be there with Windows 8. And so we’re going to make another run at this business. And we’re going to make a decision about the long-term future of webOS within HP over the next couple of months. And as soon as we make that decision, we’ll let you know on that. Because many people have said to me, well isn’t the webOS decision just completely tied to PSG? The answer to that is actually no. webOS is, has obviously use in the PSG business, but also in other businesses that we have. So it’s actually– we have to make a more holistic decision around webOS, which coming to a town near you soon, I hope.

Kulbinder Garcha – Credit Suisse – Analyst

… My question for Todd is just on the tablet strategy, Todd, what makes you confident that having been [left] this and what led to the tablet market, and certainly by engaging with Windows now with the lead of both Apple and Android, what can make you competitive in that market quickly? Especially given you referenced kind of growth for the overall PSG business going forward, I assume tablets will be part of that at some point. …

Todd Bradley – Hewlett Packard Co. – EVP, Personal Systems Group

I’ll start with the tablets.We’re at the beginning stages of a new segment in personal computing. I hardly think a couple months into it that I would clarify us as being too late. I think the work we’re doing with Microsoft is extraordinarily compelling. And frankly, I think the work we’re doing in other categories like the Ultra-Mobile space, will be very, very competitive. It’s a competitive business. It moves very, very quickly, and one we have lots of strength it.

HP: Spinning PC Unit off Would Have Cost Billions [Oct 28, 2011]

The cost of spinning off the unit would have amounted to US$1.5 billion in one-time costs and additional payments at later dates, said Tony Prophet, senior vice president of operations at HP’s Personal Systems Group (PSG) unit, which deals in PCs, smartphones and tablets.

The company had close to 100 people — executives, customers and legal advisors — working to evaluate whether to retain or spin-off the PC division, Prophet said. Other factors in the decision to retain the unit were customers’ wishes and the component purchasing power provided by the PC unit, said Prophet.

Some HP enterprise customers previously expressed dissatisfaction with the company’s decision to sell or spin-off PSG, saying they wanted to buy products from a single entity instead of going to multiple organizations for software and hardware purchases. Analysts have said that the PC business helped HP acquire hardware at cheaper rates, and that it also provided strong distribution and logistics capabilities, which were key for the printer and enterprise hardware businesses.

A lot of due diligence went into deciding to retain the PC unit, and there’s no turning back, Prophet said.

The PSG unit was valued at around $8 billion by an analyst in August when strategic alternatives were being explored. The high price made it tough sell in a down market in which other PC makers were struggling.

Looking ahead, Prophet said HP’s future PC and tablet strategy revolves around Microsoft’s upcoming Windows 8 OS. Microsoft has not announced a release date for the OS, but a top Intel executive earlier this month said the OS would be released next year.

“Obviously the major trends and the most important transition point will be Windows,” HP’s Prophet said. “We intend and are working to be a leader with Windows 8.”

HP will release a Windows 8 tablet in the future, and also ultrabooks with the OS. Ultrabooks are being promoted by Intel as a new category of thin-and-light PCs with tablet-like features.

HP’s Whitman Says She’ll Keep Strategies Begun by Apotheker [Bloomberg, Sept 23, 2011]

Hewlett-Packard Co. Chief Executive Officer Meg Whitman plans to stick by strategies set in motion by her predecessor, Leo Apotheker, betting that investors prefer steady leadership to another unsettling change of course.

Whitman, in her first interview as Hewlett-Packard’s CEO, said the company stands by plans to acquire U.K. software marker Autonomy Corp. for $10.3 billion. The company also will continue to explore whether to sell or spin off the personal-computer division, she said. Those moves were announced on Aug. 18.

“It does not signal a change in the strategy,” Whitman said yesterday of her appointment. “We are behind the actions that were taken on Aug. 18. We are firmly committed to Autonomy.”

Whitman is hewing to those plans to avoid alienating shareholders who were fed up with the about-faces that characterized Apotheker’s reign. Still, Hewlett-Packard is overpaying for Autonomy and it shouldn’t have announced a possible PC unit sale without a concrete plan in place, said Chris Whitmore, an analyst at Deutsche Bank AG.

“We’re going to get more of the same from a Meg Whitman- led HP as we did from a Leo-led HP,” said Whitmore, who is based in San Francisco and has a “sell” rating on Hewlett- Packard. “The board isn’t going to change the strategy and is going to continue down this path, which frankly was the fear.”

Shares Fall

Hewlett-Packard’s shares fell 48 cents, or 2.1 percent, to $22.32 at 4 p.m. on the New York Stock Exchange, hitting the lowest price since May 2005. The stock had jumped 6.7 percent on Sept. 21 after Bloomberg reported that Apotheker would be ousted, evidence that shareholders were relieved to see his tenure end.

Apotheker, CEO for less than 11 months, was ousted yesterday after cutting sales forecasts three times and making strategy shifts that blindsided investors. Palo Alto, California-based Hewlett-Packard also said Chairman Ray Lane will become executive chairman.

Whitman’s challenge will be boosting revenue while assuaging the investors whose dismay fueled a 47 percent plunge in Hewlett-Packard stock under Apotheker. She said the company will decide the outcome of the PC business as soon as possible.

“We’ll make a decision as fast as we possibly can,” she said in the interview. “We understand uncertainty doesn’t help the business, doesn’t help customers, doesn’t help shareholders.”

Ill-Equipped

Her experience at consumer-oriented companies such as EBay Inc., Procter & Gamble Co. and Hasbro Inc. may leave her ill- equipped to run Hewlett-Packard’s business-computing divisions, said Shaw Wu, an analyst at Sterne, Agee & Leach Inc. in San Francisco.

“She’s going to be heavily scrutinized,” said Wu, who has a “neutral” rating on the shares. “She doesn’t have the background to turn around HP.”

An estimated 25 percent of Hewlett-Packard’s sales come from consumers, Wu said. “What about the other 75 percent?”

Whitman defended her record at the helm of EBay.

“I have run a large company — not obviously as large as HP, but I have run a very large company,” she said. “While I don’t have years of experience in an enterprise business, I bought a lot of software. I was one of the largest enterprise customers in Silicon Valley.”

Disparate Groups

“That’s like saying, ‘I’ve bought an iPhone, so I can run Apple Inc.” said Whitmore at Deutsche Bank.

Whitman will need to take Hewlett-Packard’s disparate operating groups — including data-center computing gear, technology services, printers, and software — and get them working as a team, Lane said in the interview. He also lauded Whitman’s ability to communicate company strategy.

“The market’s a little confused because we’re in so many different businesses,” he said. “This is 90 percent about leadership, communications and operating execution.”

Lane, who considered becoming the CEO himself, said Hewlett-Packard executives weren’t working well under Apotheker. To explain why the board picked an outsider, Lane said on a conference call that internal managers “were not ready” to become CEO.

Whitman, 55, is credited with helping build EBay into the world’s largest Internet auctioneer, with a market value of about $40 billion. She took the company public and built an online storefront that helped thousands of small businesses peddle their wares. Yet in her final years at EBay, she couldn’t reverse a slowdown in sales growth and overpaid for Skype Technologies SA after a bidding war with Google Inc. and Yahoo! Inc. EBay later wrote down Skype’s value.

Pressure on Apotheker

Whitman joined Hewlett-Packard’s board in January after a failed bid to become California’s governor last year. Before EBay, Whitman worked as an executive at the toy company Hasbro, the floral service FTD Inc., footwear maker Stride Rite Corp. and Walt Disney Co.

Hewlett-Packard had revenue of more than $126 billion in the past fiscal year, almost 14 times the size of EBay’s sales.

“It’s not clear to me that someone who spent 30 years in the consumer space is the right person for an enterprise technology company,” said Dana Stalder, a partner at venture- capital firm Matrix Partners in Palo Alto. Stalder worked under Whitman for seven years at EBay.

Pressure on Apotheker intensified when in August he announced the overhaul that included the Autonomy deal and possible spinoff. He also killed off the company’s WebOS tablets and smartphones, five months after vowing to put the operating system on a full range of the company’s computers.

Hewlett-Packard Forecasts

Hewlett-Packard Chief Financial Officer Cathie Lesjak, who served as interim CEO before Apotheker, said yesterday on a conference call that the company was no longer confident in its fourth-quarter sales guidance. Hewlett-Packard is sticking by its profit forecast, she said.

The company said in August that fourth-quarter revenue would be $32.1 billion to $32.5 billion, with earnings of $1.12 to $1.16 a share, excluding some costs. According to Bloomberg data, analysts are predicting sales of $32.2 billion and profit of $1.14 for the period.

The board weighed whether to oust Apotheker for six to eight weeks, Lane said in the interview.

Apotheker stands to receive cash severance of at least $7.2 million, a figure that could be higher if his annual bonus was set above the minimum $2.4 million laid out in the employment agreement. Including his $1.1 million in salary received for the first year, along with a $4 million cash signing bonus and a $4.6 million relocation payment, Apotheker will have earned about $34.7 million in cash and stock for less than a year’s work.

‘Investors Wound Up’

“Not bad for a short-term job, unless you’re a HP shareholder,” said Brian Foley, a compensation consultant in White Plains, New York. “This is yet another ex-CEO of Hewlett- Packard who does very well despite the circumstances.”

Apotheker joined Hewlett-Packard after Mark Hurd departed as CEO amid a scandal over a personal relationship with a company contractor. Hurd now is a co-president at Oracle.

A steady hand may be just what Hewlett-Packard needs, said Jayson Noland, an analyst at Robert W. Baird & Co. in San Francisco. He has a “neutral” rating on the stock.

The board is directionally behind the plan Apotheker’s put in place,” Noland said. “It’s just the execution of that plan that has investors wound up.

Ray Lane Must Go at HP [Forbes, Sept 23, 2011]

Ray Lane is making the media rounds this morning, defending his decision as the Chairman of the HP (HPQ) board for firing Leo Apotheker after 11 months and hiring Meg Whitman. He did the same last night.

He never thanked Leo. He never apologized to investors or HP employees on behalf of the board for never meeting with Leo before hiring him. He made a string of ridiculous set of statements about how this board wasn’t responsible for all the botched decisions it has made over the last decade.

Lane’s answers are maddening and meant to distract the press and investors from a simple fact: Ray Lane has utterly failed in his role as Chairman of HP and needs to leave immediately.

According to an HP director who spoke to the NY Times yesterday (anonymously — what a coward!), this board was so “tired” after the in-fighting over letting go Mark Hurd that they couldn’t find time in their busy schedule to meet Leo in person before hiring him. Then, the board kept Leo in hiding for the first 4 months of his 11 months tenure — remember that? It was because they didn’t want him to get served by Oracle in a lawsuit against SAP (SAP). Then, maybe they wait another 3 months (because you should at least give a guy a quarter to show himself after you hire him and pay his $35 million for 11 months of work). Then, you get the knives out for him.

The moment an analyst hinted at that last night, Ray Lane became defensive. He declared this board wasn’t the board involved in pre-texting and it didn’t pick Leo.

Wait. It didn’t pick Leo? Which HP board did then?

A board of directors really has two jobs: hire the CEO and fire the CEO. Who hired Leo, Ray?

HP Chairman Ray Lane: A profile in courage [Dan Lyons, Sept 22, 2011]

HP board chairman Ray Lane is lashing out at critics who are pinning the blame for HP’s mess on the board of directors, who are described in this New York Times article as the “worst board in the history of business.”

Now HP’s directors are getting heat for making the incredible blunder of hiring Leo Apotheker as CEO and firing him after 11 months.

Ray says that’s not his fault, nor is it the fault of his fellow directors. “This board did not select Leo,” he says.

Lane points out that eight of the 14 current board members, including Ray Lane himself, were not involved in selecting Apotheker.

That’s true. Several of the new board members did not choose Apotheker — Apotheker chose them.

Ray Lane fails to mention that five of the new board members were selected by Apotheker (or at least with his input): Pat Russo, Dominique Senequier, Gary Reiner, Meg Whitman and Shumeet Banerji. And several of those people had long ties to Apotheker, as Bloomberg reported at the time.

But more chilling than that is the fact that Lane and Apotheker are old friends. Lane, in fact, joined HP to serve as Apotheker’s consigliere.

Lane and Apotheker have known each other for two decades. Lane joined HP at the same time that Apotheker did, in part because he wanted to work with Apotheker, according to the Wall Street Journal.

In fact their appointments were announced in the same HP press release.

In that press release, Lane said: “I am excited to join the Board of this pioneering company, and look forward to working closely with Léo – and the rest of the Board and senior management team – as they capitalize on the changes taking place across the industry. I have known and admired Léo for almost 20 years. He is ideally suited to build on HP’s strong foundation, leverage its many assets and keep the company at the forefront of innovation.”

Soon after that, Lane spoke to the San Jose Mercury News about his “close working relationship with Apotheker, whom he has known since Lane hired Apotheker as an Oracle consultant in the 1990s.”

But how things have changed. Now that Apotheker is out, Ray Lane says he wasn’t one of the guys who hired him, so the world should stop giving him shit about it.

In fact, Ray Lane now says Leo wasn’t very well qualified at all. Speaking to Kara Swisher at AllThingsD tonight, Lane said: “Leo was very wise about figuring out what HP needed to do to add value. But he did not have more important tools we needed, including operational excellence, people skills and communications skills.”

Furthermore, Lane tells AllThingsD that he’s been talking to Meg Whitman about taking over since last February — only three months after he and Apotheker joined HP, hand in hand.

Ray Lane says he approached Whitman because “she had the kind of leadership that HP needed and was lacking under ousted CEO Leo Apotheker,” Kara Swisher reports.

So, wait. In November 2010 Ray Lane joined HP for the chance to work alongside his old friend Leo Apotheker, whom he called “ideally suited” to be CEO. But by February 2011, Ray Lane was already plotting behind his back to get rid of him.

And now Ray Lane — loyal friend, and man of integrity — is angry at critics who question the judgment of the HP board of directors and suggest these folks are perhaps not the best and brightest in the business world.

This after they’ve just hired a new CEO from among their own ranks without conducting a job search because they didn’t think it was necessary and anyway time’s a-wasting and they need to fill that CEO job right away because this is, after all, the world’s largest technology company, one that does nearly $130 billion a year in revenue, and so why not just pick a CEO from whoever’s sitting in the room with you?

Of course, according to Ray Lane, Meg Whitman is an amazing talent who is ideally suited to run HP and has all the qualifications for the job and Ray Lane just totally thinks the world of her. Today.

Two thoughts:

1. Watch your back, Meg Whitman.

2. Stay classy, Ray Lane.

End of updates

HP Reports Third Quarter 2011 Results and Initiates Company Transformation [Aug 18, 2011]

HP unveiled the details of a plan to accelerate the strategy introduced in March. The plan introduced today will:

  • Move HP into higher value, higher margin growth categories
  • Sharpen HP’s focus on its strategic priorities of cloud, solutions and software with an emphasis on enterprise, commercial and government markets
  • Increase investment in innovation to drive differentiation

As part of the transformation, HP announced that its board of directors has authorized the exploration of strategic alternatives for the company’s Personal Systems Group. HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction. (See accompanying press release.)

HP will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. The devices have not met internal milestones and financial targets. HP will continue to explore options to optimize the value of webOS software going forward.

Taiwan panel makers face challenges over HP’s PC spin-off plan [Aug 22, 2011]

Hewlett-Packard’s (HP) LCD panel suppliers and contract manufacturers are bracing for changes to their partnerships with the US client in the wake of its plan to separate its PC business, according to industry sources.

The extent of changes remains uncertain at this point, but many Taiwan companies could be seriously hit if HP sells the PC business to Samsung Electronics, the sources said. Rumors have been circulated since first-quarter 2011 that HP has contacted Samsung about selling the PC business to the Korea-based firm, the sources from Taiwan’s supply chain added.

Taiwan’s Chimei Innolux (CMI) and AU Optronics (AUO), both of whom are Samsung’s major competitors in the panel market, would see unimaginable impacts on their supplies to HP, the source said, adding that panel makers in Taiwan are already facing a difficult time due to sliding sales from large-size panels amid weakened TV demand.

As for HP’s PC manufacturers, including Quanta, Foxconn Electronics (Hon Hai Precision Industry) and Inventec, their partnerships with the client could also be affected. Although HP’s orders for 2012 have already been set, changes could still be made if Samsung takes over the PC business, the sources said.

Samsung reportedly contacted Taiwan OEMs for evaluating notebook outsourcing [Aug 23, 2011]

Korea-based notebook brand vendor Samsung Electronics has reportedly contacted Taiwan-based notebook makers Quanta Computer, Compal Electronics and Pegatron Technology in August to evaluate the possibility of outsourcing notebook orders, according to sources from upstream supply chain, which added that there might be a result soon and Samsung may outsource a small volume of orders to these players.

The sources added that Samsung’s actions seem like it is already in preparation to take up Hewlett-Packard’s (HP’s) PC business.

The sources pointed out that Samsung’s notebooks are all manufactured at its plants in China, although the company had made contacted Taiwan-based notebook makers several times about outsourcing orders before, there was no result. However, Samsung, earlier this month, invited Quanta, Compal and Pegatron to its headquarters in South Korea with a rather cautious attitude, which the sources believe was an indication that Samsung might be already in preparation for expanding its business.

The sources pointed that the Taiwan’s notebook OEM industry’s production efficiency and cost control is currently unmatched worldwide; therefore, if Samsung takes over HP’s PC department, HP’s over 40 million PC shipment volume will still need to depend on Taiwan OEMs. However, related suppliers of components such as panel, memory and battery may be affected as Samsung has a rather strong vertical integration supply chain.

Within HP’s 40 million units of PC orders in 2011, Quanta will ship 20 million units with Foxconn Electronics (Hon Hai Precision Industry) to ship eight million units, Inventec, seven million units, Wistron, 3-4 million units and Compal, two million units.

The sources pointed out that if HP’s PC business is sold to other brand players, makers such as Quanta, Foxconn and Inventec are expected to see the most impact as they have higher order proportions with HP, while Wistron and Compal are expected to benefit.

Commenting on the event, Quanta pointed out that since the information is still limited, the company can only monitor the outcome carefully; however, since the new PC orders from HP for 2012 are all already set, it is unlikely to have significant changes. However, if Samsung takes down HP’s 40 million units of PC shipments and with Samsung’s own 10 million units, the company will need to ship 50-60 million units totally in one year and will definitely need to find OEM partners as Samsung itself may have difficulty to make all these orders, Quanta noted.

However, Quanta will continue to work on cloud computing and the related products in the future to increase its non-notebook business’ contribution.

Meanwhile, Inventec pointed out that HP’s announcement seems like is for testing the market’s reaction and believes that whether HP will sell the business will still depend on the market’s feedbacks. In addition, since HP is given up its PC business because of the weak profitability of consumer notebooks, Inventec, which is manufacturing mainly HP’s enterprise notebooks, expects to only see a limited impact from the event.

HP PC spin-off plan may cause fierce PC price competition in 4Q11 [Aug 23, 2011]

Hewlett-Packard’s (HP’s) plan of spin off its PC business has already caused a great impact to the PC industry and with the company reportedly already started working on plans to reduce employee numbers and tighten up resources, sources from PC players expect HP will turn aggressive clearing its inventory in the fourth quarter and create fierce price competition.

Sources from the upstream supply chain pointed out that HP stepping out of the PC market may cause significant drops in market confidence for the PC industry since the action is an indication of HP’s pessimistic attitude toward the industry’s future and the pessimistic atmosphere will only increase in the future.

The sources pointed out that HP’s price competition in the fourth quarter will be the most seriously impact toward its competitors for the short term, as for the long term, things such as which player that will take up HP’s PC business, changes in the supply chain and market ranking will all greatly affect notebook players in the future.

Acer already adopting notebook price cuts in the second quarter to clear its inventory in Europe and indirectly forcing its competitors to join the competition. If HP starts another price competition in the fourth quarter, notebook players’ product average selling price (ASP) may drop even further and relatively damage their gross margin.

HP: Down 20%; Now Officially Hated By Almost Everyone [Forbes, Aug 19, 2011]

Hewlett-Packard shares are down sharply Friday after the company’s flurry of news yesterday, which included an $11 billion deal to buy Autonomy, the decision to spin the PC business, the shut down of the WebOS hardware operations, in-line July quarter results and a dark forecast for the October quarter and beyond.

Today alone, the company has lost more than $12 billion in market value.

To say yesterday’s news has not been well received would be a substantial understatement. At least a half dozen analyst cut their ratings on the stock this morning, and few others had anything nice to say about the near-term prospects for the company.

One of the most depressing aspects of the story this morning is that the market already seems to be souring on the leadership of new CEO Leo Apotheker. The general Street view is that the company is doing too much at once here; that the Autonomy deal is ill-timed and expensive; and that the company should have taken a more decisive action on the PC unit, rather than shopping it around in a process the company expects to take a year or more. It’s also astonishing (or on second, thought, predictable) that little more than a month after launching the first WebOS tablet and the first phones following the acquisition of Palm, it has already decided to stop selling them. Imagine the dollars they could have saved had they figured out months ago what the world already knew: that their chances of denting either the tablet or smart phone market were somewhere between slim and none.

Is this Leo’s fault? Or Mark Hurd’s fault? Or Carly Fiorina’s fault? It doesn’t matter. What matter is that the once might Hewlett-Packard, the world’s largest PC company, and one of the globe’s most wide-ranging technology companies, is badly leaking, and taking on water. Let’s hope it doesn’t sink.

Update: Did The Market Get It Wrong About Hewlett-Packard? [by Todd Ganos on Forbes, Aug 20, 2011]

Hewlett-Packard has announced that it will either spin off or sell its PC and mobile computing business units. After this announcement, the market took HP’s stock price down 20 percent. My question is: did the market get it wrong about Hewlett-Packard?

IDC and other tech industry observers will note that while Apple has roughly 15 percent of market share of unit sales of personal computers, Apple has roughly 90 percent of all earnings created by sales of personal computers. Apple has purposefully avoided the low-margin commoditized segments of the personal computer market. The same can said about the mobile computing segments.

Renowned management theorist Peter Drucker said that only two things matter in a company: innovation and marketing; everything else was a (commoditized) expense. Innovation provides for differentiate products and services; marketing conveys the value of that differentiation.

Without a clear sense of product differentiation in the personal computer and mobile computing segments, products will be seen as commoditized. One should expect few profits without innovation and differentiation.

So, was HP’s decision a good one? I would say yes. Capital that is currently allocated to these low-margin segments is a waste. Redeploying such capital seems smart. Now, what about HP’s purchase of Palm. Yes, it’s wasted money. But, it’s a sunk cost. HP’s management must look forward not back. It’s about admitting that they tried something, it didn’t work, now they’re moving on. With HP selling at half of its 52-week high, it seems to be a buy.

Note: There is no exclusion now in cloud client devices becoming commodities. The latest proof of that is the Huawei’s IDEOS U8150 smartphone for US$86 in Kenya: 350,000 units sold in 8 months [Aug 17, 2011].
End of update

Now only one question remains: Why Autonomy is a smart buy for HP [Aug 18, 2011]

I’ve been fascinated by Autonomy, Britain’s largest software company, for years. Those who vaguely recall the name tend to associate it with the company’s knowledge management software of a decade ago. Or more recently, they may think of the  Aurasma iPhone application released this year, which recognizes images (such as movie posters) in the real world and swaps in videos for those images in real time.

The latter technology points to the company’s core intellectual property: so-called meaning-based recognition. Autonomy excels at enterprise search and language recognition using Bayesian techniques originally developed by the company’s eccentric yet charismatic CEO Mike Lynch. The core of Autonomy’s business is in applying meaning-based recognition to identify compliance-sensitive documents and classify them for archiving, where they can be searched using the same Bayesian methods.

A little-known fact is that the company operates one of the world’s largest public clouds, containing petabytes of its customers’ compliance-sensitive material. Earlier this year, IDC identified Autonomy as the fastest-growing search and discovery vendor — and Autonomy doubled down in the space when it announced its intent to buy Iron Mountain’s digital services business in May.

Given Autonomy’s unique intellectual property and its leadership in an area strategic to the next phase of computing, I’ve wondered for years why the company remained independent. A company that has enjoyed major success in enterprise search and compliance — and a big cloud business to boot — helps forward HP’s strategic direction, as outlined by CEO Léo Apotheker shortly after he took the reins at HP.

What maybe even more important, however, is how that technology might be leveraged by HP in enhancing the way humans interact with computers. The push on that frontier, most people would agree, has proceeded slower than anticipated; HAL 9000 still seems a long way off. To me, Autonomy’s meaning-based recognition technology has always seemed to have limitless possibility — as the whizzy Aurasma technology amply illustrates. HP is making a very smart buy.

This article, “Why Autonomy is a smart buy for HP,” originally appeared at InfoWorld.com. Read more of Eric Knorr’s
Modernizing IT blog
, and for the latest business technology news, follow InfoWorld on Twitter.

About Autonomy (at the end of press releases):

Autonomy Corporation plc (LSE: AU. or AU.L), a global leader in infrastructure software for the enterprise, spearheads the Meaning Based Computing movement. IDC recently recognized Autonomy as having the largest market share and fastest growth in the worldwide search and discovery market. Autonomy’s technology allows computers to harness the full richness of human information, forming a conceptual and contextual understanding of any piece of electronic data, including unstructured information, such as text, email, web pages, voice, or video. Autonomy’s software powers the full spectrum of mission-critical enterprise applications including pan-enterprise search, customer interaction solutions, information governance, end-to-end eDiscovery, records management, archiving, business process management, web content management, web optimization, rich media management and video and audio analysis.

Autonomy’s customer base is comprised of more than 20,000 global companies, law firms and federal agencies including: AOL, BAE Systems, BBC, Bloomberg, Boeing, Citigroup, Coca Cola, Deutsche Bank, DLA Piper, Ericsson, FedEx, Ford, GlaxoSmithKline, Lloyds Banking Group, NASA, Nestlé, the New York Stock Exchange, Reuters, Shell, Tesco, T-Mobile, the U.S. Department of Energy, the U.S. Department of Homeland Security and the U.S. Securities and Exchange Commission. More than 400 companies OEM Autonomy technology, including Symantec, Citrix, HP, Novell, Oracle, Sybase and TIBCO. The company has offices worldwide. Please visit www.autonomy.com to find out more.

More:
Autonomy Press Fact Sheet [Oct 15, 2009]
Autonomy Technology Overview [Autonomy, PDF, Sept 28, 2009]
Autonomy’s Technology — A Different Approach [Autonomy, Aug 20, 2008]

More than 80% of all data in an enterprise is unstructured information. This encompasses telephone conversations, voicemails, emails, electronic documents, paper documents, images, web pages, video and hundreds of other formats. Unfortunately, attempts to leverage this immense and strategic resource often fail because many businesses lack the requisite technology to understand and effectively utilize content that resides outside the scope of structured databases.

Similarly, unstructured processes are equally unwieldy yet comprise the bulk of business operations. Current trends anticipate the rapid proliferation of rich media, widespread adoption of VOIP, growing use of IPTV and increased scrutiny of white-collar crimes. This overwhelming growth demands an automated solution that can effectively manage an unstructured digital morass.

These concerns necessitate an information infrastructure platform that addresses all classes of information in a manner analogous to well established methods for structured databases. Akin to the Relational Database Management System (RDBMS) that revolutionized the computing industry in the 1960s, this innovative platform enabled computers to process not only structured data, but also vast amounts of semi-structured and unstructured information using a global relational index.

Autonomy’s ability to process all forms of digital information on a single platform offers a unique solution to a growing number of applications and devices that are increasingly dependent on utilizing unstructured information. Autonomy employs a unique combination of technologies to enable computers to form a contextual understanding of all digital content, as well as understand people’s interaction with the data. Autonomy’s technology eliminates the traditionally manual and costly operation of processing and analyzing information by performing these functions automatically and in real-time. This represents substantial savings for every type of organization and industry and is driving the accelerated adoption of Autonomy’s technology across a diverse range of vertical markets.

Investors — An Introduction to Autonomy [Jan 29, 2010]

Summary

  • Previously computers could only process information if it was organised in rows and columns, or “structured”
  • The amount of unstructured information such as email, instant messaging and video is growing exponentially so that it now exceeds structured data 4:1
  • This is the biggest change in the IT industry to date because it is the first major change to the information rather than the technology
  • Autonomy’s technology understands the meaning of all unstructured information and automates tasks that could only be done manually before
  • Over 20,000 global companies rely on Autonomy’s technology today
  • A pure software business model has allowed us to achieve a 5 year EPS CAGR of 73%

Autonomy’s Products

In Autonomy’s fifteen year history our fundamental aim has not changed: computers should map to our human world and solve our problems, rather than the other way around. Autonomy has developed a fundamental piece of technology that allows computers to understand the meaning of unstructured information and process it automatically. That technology is the Intelligent Data Operating Layer (IDOL).

The proliferation of unstructured information is occurring in every industry from manufacturing to financial services, and so the IDOL platform is a truly horizontal technology that is used across every vertical.

Business Model

Indirect

Autonomy has over 400 Value Added Resellers (VARs) such as Accenture, IBM Global Services, Cap Gemini, HP and Wipro. Around 80% of Autonomy’s licence revenues come from this channel. Autonomy has an elite team of partner managers who attend occasional client meetings and ensure that customers receive the appropriate level of service, but these partners offer domain specific expertise and a global presence which allows Autonomy to run an incredibly efficient sales operation.

OEMs

Autonomy has over 400 Original Equipment Manufacturer (OEM) relationships with other major software vendors that build our technology into their products. These OEMs span every software sector from CRM to Product Lifecycle Management software. An OEM pays an upfront fee and then writes its new product which can take up to two years depending on its product roadmap and release cycle. Once the product is launched they pay a royalty stream of around 3 percent of product sales to Autonomy. This we would expect to expand overtime as OEM partners embed more IDOL functionality in subsequent product releases.

Licence

Customers who purchase a licence for Autonomy’s software initially pay an Average Selling Price (ASP) of around $400,000. A typical initial contract will likely include four of Autonomy’s 500 functions and around four connectors. The pricing model is based on three drivers of value: the number of users, the number of functions / connectors, and the amount of information being processed – any two will be prevalent in a particular use case. For example, in intelligence processing type applications it will be the amount of data rather than number of users that is the dominant factor, but in a corporate environment for a knowledge portal it may well be the large number of users that determines the pricing. In addition to the upfront licence payment these customers also pay around 15 percent support and maintenance, which is due annually.

SaaS and Hosted

Autonomy also operates Software-as-a-Service (SaaS) and hosted models, where the solution is run on hardware owned by Autonomy in one of our data centres. In fact, Autonomy runs the largest managed archive in the world at over 17 Petabytes of data.

Appliance

Currently a small part of the business focused on quick time-to-value and high return. Where customers have an urgent need to deploy IDOL, either for regulatory or commercial imperatives, we are able to provide a pre-installed licence on appropriate hardware to start generating an immediate return. The value of these solutions is attributable almost entirely to the functions offered by the licence, so although there are some hardware costs involved, the margin profile is not widely dissimilar to our traditional licence business.

Financial Model

Autonomy is one of the very rare examples of a pure software model. Many software companies have a large percentage of revenues that stems from professional services, because they have to do a lot of customisation work on the product for every single implementation. In contrast, Autonomy ships a standard product that requires very little tailoring, with the necessary implementation work carried out by approved partners such as IBM Global Services, Accenture and others. This means that after the cost base has been covered, for every extra dollar of revenue that comes in, you simply take off nine cents to get to the gross margin and then a further ten cents which is paid in commissions to our partner managers. That leaves approximately 80 cents which falls straight through to the bottom line. What this offers is a business model with a proven record of strong operating leverage and that is expected to continue to deliver industry leading operating margins and revenue to cash conversion.

Autonomy’s Technology — Understanding Meaning: An Evolution [Autonomy, June 26, 2008]

Evolution of Search

Autonomy Search Solutions

From the time of the very first computers, their inability to process human-friendly, “unstructured” information has posed a considerable challenge. The modern IT industry was founded on the principle that, for example, if the number in “Column 3” goes to zero, the computer will automatically order more stock for the warehouse – in other words, the position of a piece of information tells the computer what to do with it – and a tremendous amount of effort has been poured into sorting and distilling unstructured information into tidy rows and columns.

Increasingly, structuring information in this way does not represent a viable solution, not only because of the incredible amount of manual effort required but because by organizing information in this way, its richness and subtleties are lost. Consequently, attention has turned to finding alternative, more intelligent solutions to the problem of unstructured information and the journey towards integrated MBC began…

Keyword Search

Because computers were unable to understand the meaning of information, the seemingly obvious alternative was to simply search it in order to locate any keywords relevant to the desired subject. The problem with this approach is that the computer has no way of identifying what a given keyword means, and therefore cannot process the information afterwards. For example, if a user types in the letters “D-O-G” the computer has no concept of what that word means; it will simply identify all of the documents which contain that combination of letters, which might produce a list of results thousands of pages long.

Keyword Search +

In order to improve the results from straight-forward keyword searches, the technique was enhanced by adding a series of arbitrary rules so that the most relevant results would appear at the top of the list. For example, if the search term appears in the title of a document, five points are added to that result, and if it appears three times within the document, one point. This works to a certain extent but the important issue is that there is still no understanding of what a “D-O-G” is, or does. In addition, the rules have to be modified manually and become very costly to maintain every time a subject develops.

PageRank

On the Internet there is a simple trick to get around this problem because, in many cases, the most popular information is also the most relevant. The importance or popularity of a Web page is approximated by counting the number of other pages that are linked to it, and by how frequently those pages are viewed by other users. This works quite well on the Internet but in the enterprise it is doomed to failure. Firstly, there are no native links between information in the enterprise. Secondly, if a user happens to be an expert, perhaps in the field of gallium arsenide laser diodes, there may be no one else interested in the subject, but it is still imperative that they find relevant information.

Federated Search

As a result of new regulatory drivers such as the FRCP, enterprises need to be able to guarantee that a search has covered absolutely every piece of relevant information across potentially hundreds of different repositories throughout the enterprise. Most search engines are not actually capable of doing this so they ask the original repositories to perform the search – a process known as federated search.

Federated search is often advertised as an asset. However, it creates significant problems because it generates vast increases in network traffic. Every time the user enters a query, each and every repository has to do a search, so a repository that previously ran a search perhaps 0.01 times per user per day, starts to glow white-hot. More importantly, all of the results are searched using different algorithms which means that all of their relevance rankings are different and incompatible when compiling a results list. In addition, most of the underlying search algorithms used in the repositories are not compliant with the new FRCP. Consequently, federated search is not compatible with a pan-enterprise platform.

All of the approaches described up to this point fit squarely into the mid-enterprise search market. A technology which is limited to these capabilities is not suitable for a true pan-enterprise deployment, for reasons that will now become clear.

Conceptual Search

A critical leap forward came with the ability to actually “understand” the idea behind a given phrase, and retrieve information which is conceptually related, even when a particular keyword is not used. So for example, if the user types in the letters “D-O-G”, a conceptual search engine will retrieve all the information conceptually related to but not confined to the word “D-O-G”, perhaps information about a “hound” as well as “walks” and different breeds of dog, because it understands the idea represented by the word. This is incredibly powerful because critical information is often missed because users do not always use the same search terms.

Secure Search

Security is absolutely paramount to the enterprise and the challenge this poses is staggeringly complex, from protecting the enterprise’s intellectual property from unauthorized access, to ensuring internal compliance with an ever-growing list of regulatory requirements. Most users are not permitted to view most documents or even be aware that they exist. Typically, around 1/1000 documents should be available to each user and access privileges must be specific to each of the many underlying repositories in the enterprise. Achieving air-tight security without significant performance degradation is a considerable challenge.

Legal Search

In order to scale without impeding performance, some technologies fail to search each document in its entirety. This prevents users from retrieving valuable information and it exposes the enterprise to significant compliance risk. Such technologies begin to calculate the relevance of each document at indexing time; however, if at the beginning of the calculation a particular result appears to be irrelevant, the engine will stop calculating, effectively assuming the result is not relevant without reading all the way through. Consequently, a relevant snippet of information on the last page of a hundred page report could be overlooked and the legal consequences could be absolutely catastrophic. In fact, the company CEO could go to jail because the search failed to retrieve all of the information required by the court.

Audio and Video Search

The full potential of multimedia content is often not utilized due to the fact that it has traditionally taken considerable manual involvement to process. Consequently, intelligence lies dormant in resources such as recorded meetings, training videos and broadcast content. True Pan-Enterprise Search technology automatically captures, encodes and indexes television, video and audio content from any source and provides users with the ability to search this with pinpoint accuracy and treat rich media content in the same way as more traditional forms of information.

Categorize, Alert and Profile

When computers “understand” information, they can start to automatically process it and begin to bring information to the user rather than the other way round. For example, through forming an understanding, computers can automatically create taxonomies, alert users to new and relevant information in real-time or automatically profile an individual’s interests based on what they read and write, offering them interesting information without the need to search or connect with similar people.

Clustering, Scene Detection, Speaker Identification and Sentiment Analysis

Understanding information allows computers to cluster information, identifying inherent themes or clusters of conceptually similar information. In addition, using this approach it is possible to detect irregularities in everyday scenes for security purposes, identify well-known speakers in broadcast media and analyze conversations to detect positive or negative sentiment.

Integrated Meaning Based Computing

In examining the different approaches to the challenge of unstructured information, it becomes clear that the solution does not boil down to plain search. It is only through understanding the meaning of ALL information that computers are able to automatically process it and provide users with the ability to handle and maximize the value of this rich resource. MBC addresses the full range of information challenges and consequently forms the central requirement of major enterprise deployments all over the world.

More information on HP Strategy

HP Sets Strategy to Lead in Connected World with Services, Solutions and Technologies [March 14, 2011]

The convergence of cloud computing and connectivity is fundamentally changing how IT is delivered and how information is consumed. Powerful trends like consumerization, cloud computing and connectivity are redefining the way people live, businesses operate and the world works. Traditional on-premise, proprietary computing resources are gradually being complemented and even replaced by the massive, agile and open computing resources of the cloud. Meanwhile, the cloud is combining with mobility to create ubiquitous connectivity.

In HP’s view, a hybrid environment that combines the best of traditional environments with private and public clouds will be the prevailing model for many large enterprises for a long time. With its leading services portfolio, HP is well positioned to be the trusted partner of customers as they move from the traditional to the hybrid world. [HP Chief Executive Officer Léo] Apotheker committed to continue enhancing HP’s offerings across its broad hardware, software and services portfolio to meet evolving customer demands while also leveraging its core strengths to develop the cloud- and connectivity-based solutions of the future to meet the needs of consumers, small and midsize companies and large enterprises. This includes becoming a leading provider of cloud-based platform services.

In his presentation, Apotheker examined the impact of industry trends on users and businesses, and how those trends can best be met through HP’s portfolio, core businesses and scale. Of note in the speech:

  • HP announced it intends to leverage its position as a leading provider of cloud technology to develop a portfolio of cloud services from infrastructure to platform services. HP also signaled it plans to develop and run the industry’s first open cloud marketplace that will combine a secure, scalable and trusted consumer app store and an enterprise application and services catalog.
  • HP intends to build webOS into a leading connectivity platform. As the world’s No. 1 maker of PCs and printers, HP has the potential to deliver 100 million webOS-enabled devices a yearinto the marketplace, and HP plans to use that scale along with leading development tools to build a robust developer community that is eager to access every segment of the market and every corner of the globe.
  • At the event, highlighting an increasing focus to bring innovation to market faster, HP demonstrated a new “big data” appliance, leveraging the unmatched performance of HP computing power mated with real-time, high-speed analytics from Vertica Systems, which HP recently announced its agreement to acquire. HP expects to close the acquisition in its second fiscal quarter and have the HP-branded appliance ready for market immediately thereafter. The proposed HP Vertica solution will offer a choice of delivery options – from appliance, to software, and in the cloud.

Strategic priorities

HP’s strategy will be driven across a multitude of initiatives, focused on three strategic areas:

Cloud: HP plans to build a full cloud stack and help transition customers to hybrid cloud environments. HP intends to leverage its scale, reliability and security in its current hardware, software and services offerings. HP also plans to grow its higher-value services that offer greater strategic value.

Apotheker today unveiled the company’s plans to build an open applications marketplace that integrates consumer, enterprise and developer services. The platform will support multiple languages and will be open to third-parties. HP will vet applications for security and interoperability to facilitate an environment that is both trusted and open. A device-aware HP cloud will configure and send the appropriate services to the device that the customer is using, and connected devices will intuitively access services the customer needs.

Connectivity: HP also intends to be a leader in the area of connectivity. HP already has a globally distributed installed base in both the consumer and enterprise, and ships two printers and PCs a second, which will be webOS enabled– this huge, growing installed base of devices provides enormous opportunity upon which to build HP-, customer- and ecosystem-driven innovation. HP and its ecosystem of partners will continue to provide context-aware experiences for consumers, SMBs and large enterprises with secure information creation, digitization, transformation and consumption — anytime, anywhere.

Software: Through a build, buy and partner approach, HP intends to continue to enhance its leading management and security portfolio. Using that as a foundation, the company plans to address real-time analytics for “Big Data,” which is the combination of structured and the much faster growing unstructured data set. Upon completion, HP’s acquisition of Vertica will provide an important asset in this area. HP’s digitization offering also provides important information management capabilities that can be verticalized for specific industries. HP will continue to invest in leading-edge technologies and services that go beyond today’s limited point solutions to protect the modern enterprise and provide the security and information backbone that enterprises rely on for visibility and insight across distributed infrastructures and new hybrid environments.

In addition, Apotheker said HP will continue to build upon its financial strength, with a focus on performance that is expected to allow the company to expand into higher-value offerings, grow share of wallet by creating greater strategic value for customers, deliver on the power of the full HP portfolio and, therefore, feed the company’s core businesses. The focus on performance will come through a program focusing on growth, operational excellence and quality.

HP to Evaluate Strategic Alternatives for Personal Systems Group [Aug 18, 2011]

HP today announced that its board of directors has authorizedthe evaluation of strategic alternatives for its Personal Systems Group (PSG), including the exploration of the separation of its PC business into a separate company through a spin-off or other transaction.

PSG has a proud history of innovation and technological leadership as well as a strong operating track record and industry-leading profitability. PSG is the leading manufacturer of personal computers in the world and had annual revenues of approximately $41 billion in fiscal year 2010. PSG enjoys leading global market positions in consumer and commercial PCs.

HP is implementing a plan to fundamentally transform the company. An important component of the plan is focusing its investments, resources and management attention to drive higher value solutions to enterprise, small and midsize business and public sector customers. HP believes that the exploration of alternatives for PSG will help the company accomplish its strategic goals and pursue profitable growth and enhanced shareholder value. A post-transaction HP would continue to help its customers manage the information explosion and address their most critical needs through a portfolio that spans printing, software, services, servers, storage and networking.

“The exploration of alternatives for PSG demonstrates our commitment to enhancing shareholder value and sharpening our strategic and financial focus,” said Léo Apotheker, HP president and chief executive officer. “In March we outlined a strategy for HP, built on cloud, solutions and software to address the changing requirements of our customers, shaped heavily by secular market trends that are redefining how technology is consumed and deployed. Since then, we have observed the acceleration of these market trends, which has led us to evaluate additional steps to transform HP to meet emerging opportunities. We believe the acquisition of Autonomy, combined with the exploration of alternatives for PSG, would allow HP to more effectively compete and better execute its focused strategy.”

The personal computing market is quickly evolving with new form factors and application ecosystems. Given these realities, HP believes it is in the best interests of the company and its shareholders to explore ways for PSG to position itself to address these rapid changes and maintain its technological and market leadership positions.

“We believe exploring alternatives for PSG could enhance its performance, allow it to more effectively compete and provide greater value for HP shareholders,” said Apotheker. “PSG is a world-class scale business with a leading market share position and a highly effective supply chain and broad reach and go-to-market capabilities. We believe there are alternatives that could afford PSG more autonomy and flexibility to make strategic investment decisions to better position the business for its customers, partners and employees.”

New high-tech and direct investment relationships between the US and China?

With more than $3.2 trillion in foreign currency reserves, out of which $1.17 trillion is in US Treasury bonds while also heavily constrained to have just a mere 0.1 percent of the total foreign direct investment in the U.S., China is extremely worried about the safety of the country’s dollar assets. China’s state-run Xinhua News Agency made it quite clear in Beijing’s first official response to the Standard & Poor’s decision to downgrade the U.S. credit rating that:
After historic downgrade, U.S. must address its chronic debt problems [Xinhua, Aug 6, 2011]

The days when the debt-ridden Uncle Sam could leisurely squander unlimited overseas borrowing appeared to be numbered as its triple A-credit rating was slashed by Standard & Poor’s (S&P) for the first time on Friday.

Though the U.S. Treasury promptly challenged the unprecedented downgrade, many outside the United States believe the credit rating cut is an overdue bill that America has to pay for its own debt addition and the short-sighted political wrangling in Washington.

Dagong Global, a fledgling Chinese rating agency, degraded the U.S. treasury bonds late last year, yet its move was met then with a sense of arrogance and cynicism from some Western commentators. Now S&P has proved what its Chinese counterpart has done is nothing but telling the global investors the ugly truth.

China, the largest creditor of the world’s sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China’s dollar assets.

To cure its addiction to debts, the United States has to reestablish the common sense principle that one should live within its means.

International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currencymay also be an option to avert a catastrophe caused by any single country.

For centuries, it was the exuberant energy and innovation that has sustained America’s role in the world and maintained investors’ confidence in dollar assets. But now, mounting debts and ridiculous political wrestling in Washington have damaged America’s image abroad.

All Americans, both beltway politicians and those on Main Street, have to do some serious soul-searching to bring their country back from a potential financial abyss.

The way out of the uncertainty about the safety of dollar assets has clearly been indicated by Xinhua journalist Deng Yushan today:
Better open the U.S. door wider than scapegoat RMB [Aug 19, 2011]

With U.S. Vice President Joe Biden in China, the yuan has once again become fodder for the headlines of some Western newspapers amid pretty serious reports that the guest from Washington would press Beijing to allow the Chinese currency to appreciate more rapidly.

Any speculation about the alleged undervaluation of the yuan is indeed wide of the mark. In the past decade, so much has been said about the Chinese currency, also known as the renminbi or RMB, in the West, and it is always like beating a dead horse.

Simply put, the exchange rate has never been the real cause of the huge U.S. trade deficit with China.

For starters, the Chinese currency has already appreciated more than 20 percent against the U.S. dollar since China unpegged it from the greenback in the 2005 reform of its exchange rate regime. In the first half of this year, it gained 2.33 percent.

The U.S. trade deficit with China, meanwhile, has persisted. According to Chinese statistics, it was about 114 billion U.S. dollars in 2005, but it increased to over 180 billion dollars in 2010.

Washington and Beijing may quarrel about the “real figures” of the trade deficits by using different calculations. But the plain fact is that large U.S. trade deficits with China continue to exist even as the Chinese currency has appreciated against the U.S. dollar significantly in the past six years.

Meanwhile, China has been making serious efforts to create a more flexible exchange rate regime in a gradual way, taking into account both internal realities and external conditions. History has repeatedly demonstrated that radical exchange rate fluctuations are a recipe for financial and economic calamities.

As the second largest economy next only to the United States and an important powerhouse for global economic growth, China has to maintain financial stability and economic soundness. A volatile Chinese economy is no good news for the United States and the broader world.

Rather than misplaced blame and charged rhetoric, sensible and viable options are on the table for U.S. policymakers to wipe away much of the red ink and catch hold of the elusive balance. Ready ones include Washington relaxing its restrictions on high-tech exports to China and Uncle Sam opening his door wider to Chinese investors.

Washington has its due security concerns while selling products of super-sensitive technologies. However, as U.S. Ambassador to China Gary Locke said last year when he was commerce secretary, some of the export regulations “make no sense” as many items on the control list have already been readily available from companies around the rest of the world.

While reshaping its unnecessarily tight export policy toward China, the United States can also take off its behind-the-times colored glasses and take in more Chinese direct investment so as to better redress the general imbalance of the economic and trade exchangesbetween the two giants.

Chinese investment fully deserves fair treatment. A recent joint study by the New York-based Asia Society and the Washington-based Woodrow Wilson International Center for Scholars points out that China now accounts for a mere 0.1 percent of the total foreign direct investment in the U.S., while Chinese firms in the U.S. are estimated to have created more than 10,000 local jobs.

As many from both sides of the Pacific Ocean have appealed over and again, Chinese investment in the U.S. should be encouraged, and the U.S. process of screening investment for national security concerns should be insulated from political interference.

China’s FDI to help US growth [China Daily US Edition, May 5, 2011]

WASHINGTON – Political fear mongering about Chinese direct investment in the United States could cause the US to miss out on employment and investment opportunities, American scholars said.

The warning was sent by scholars on Wednesday in the form of a recent study on Chinese foreign direct investment (FDI) in the US. Entitled An American Open Door? – Maximizing the Benefits of Chinese Foreign Direct Investment, the study shows that increases in China’s direct investment in the US in the coming decade will help with economic growth and job creation in the country.

Over the past two years, the value of Chinese FDI assets in the US has grown 130 percent annually, said Daniel Rosen, an economist and one of the two authors of the study.

He and economist Thilo Hanemann estimate that in 2010 alone, Chinese investments in the US amounted to $5 billion.

By combining data from professional databases, media reports and industry contacts as well as documenting real-time Chinese investments, they show that Chinese firms have opened businesses in at least 35 states and created some 10,000 jobs.

Profitability is the essential motive behind the Chinese investment, Rosen said, adding that Chinese firms are likely to “place some $1 trillion to $2 trillion in direct investments around the world over the coming decade”.

Stapleton Roy, former US ambassador to China, said that the study offers “informed basis for potential controversy that tends to rise as China shifts its global posture from being a net absorber of FDI to a major provider of FDI, a trend that has begun to emerge in the last few years“.

The study has “brought together the best factual bases for understanding both positive aspects of Chinese FDI in the US and potential risks that exist with FDI in advanced countries”, said Roy, who is director of Kissinger Institute on China and the United States at the Woodrow Wilson International Center for Scholars, which co-sponsored the study with the Asia Society Center on US-China Relations.

The two authors addressed the national security issue that has aroused outcries particularly in the US Congress, saying that the US should continue its screening through the Committee on Foreign Investment in the US (CFIUS), a group headed by the Treasury department with members coming from defense and intelligence departments.

While Rosen defended CFIUS’ role, he did admit that Huawei’s continued failures in major mergers and acquisitions in the US along with other much publicized cases has “already planted seeds of mistrust among Chinese entrepreneurs and Chinese firms that are considering operating in the US or Germany or Canada and someplace else“.

The flow of investment from China to the US constitutes “one of the fundamental changes in US-China relations”, said Orville Schell, director of the Asia Society Center on US-China Relations.

Schell said the US “will suffer” if it cannot find ways to “be as open to Chinese capital as we are to other firms”, even with national security issues considered.

Background(from Xinhua or Xinhuanet sources):

China increases U.S. Treasury holdings in June [Aug 17, 2011]

US Treasury holdings rise in June

(Photo: China Daily)

BEIJING, Aug. 17 (Xinhuanet) — China purchased another $5.7 billion of US Treasuries in June, an investment described by one expert as “the best of a bad bunch”, amid growing calls for the country to diversify its foreign reserves.

June was the third consecutive month that China increased its holdings in US Treasury bonds, despite concerns over the safety of dollar assets.

The new purchase boosted China’s holdings to $1.17 trillion as of the end of June, a period when global investors were worried about the outcome of the US debt ceiling debate.

China added to its holdings by $7.6 billion in April and $7.3 billion in May, according to data from the US Department of the Treasury.

As the largest creditor of the US, China has been closely watched for its investments in dollar assets, especially after Standard & Poor’s downgraded the credit rating of the US.

Japan, the second-largest holder of US Treasuries, reduced its holdings by $1.4 billion in June, leaving them at $911 billion. Britain boosted its holdings from May’s $346.8 billion to $349.5 billion in June.

Yuan Gangming, a researcher at the Center for China in the World Economy at Tsinghua University, said the purchasing of US Treasuries reflects China’s limited choice regarding its $3.2 trillion foreign exchange reserve.

“Increasing the holdings despite the slow economic recovery in the US and signs of looming debt problems is ‘choosing the best of a bad bunch’, meaning there are no better places for China to put such a large amount of money,” Yuan said.

Yuan believes that activity in US Treasuries by Japan and Britain has more to do with their own domestic situation rather than the actual value of the bonds.

Although the US economy has been overshadowed by the rating downgrade, the country’s fundamentals in the long term remain strong, Yuan said.

Ken Peng, senior China economist with BNP Paribas, said increasing the holdings in US bonds is not too significant.

“What really matters is the proportion of China’s newly increased US dollar assets (including Treasury bonds) to the newly increased foreign exchange reserves,” he said. “Though there is no way to get the figure, we estimate that the proportion is gradually dropping.”

He said that the key method to address China’s foreign reserves dilemma is to achieve a trade balance.

“If the country’s foreign exchange reserves continue to grow at a fast pace, there is little chance of getting out of the cycle,” Peng said. “You have to do something with the accumulated dollars.”

China’s trade surplus surged to $31.5 billion in July, the highest level in more than two years, as exports rose to a record level, the General Administration of Customs said last week.

Analysts said that while there is not much that China can do in the short term with its foreign reserves, it should nonetheless try to diversify.

“Gold probably tops the list, besides euro-denominated assets and debt of the emerging markets,” said Yao Wei, China economist with Societe Generale in Hong Kong.

“The share of gold in China’s foreign exchange reserves is significantly lower than other countries. The pace of diversification will be subject to the situation in global financial markets and China’s own currency reform.”

Zhu Zhiqun, a professor of political science and international relations at Bucknell University in Pennsylvania, said China should be “more creative” and diversify investments.

“Chinese companies can help failing US businesses through acquisitions and purchases. The US Congress is likely to block Chinese investment in key sectors related to US national security, such as the oil industry, but it is not opposed to Chinese investment in less sensitive businesses,” Zhu said.

(Source: China Daily)

China to allow faster currency appreciation: analysts [Aug 11, 2011]

BEIJING, Aug. 11 (Xinhuanet) — China, backed up by rising exports, is expected to allow a faster appreciation of its currency, which also enables the country to stave off hot money inflows and combat inflation.

The People’s Bank of China, the central bank, set the official medium trading price at 6.4167 yuan against one U.S. dollar Wednesday, marking a new record high of the Chinese currency trading the greenback since Beijing embarked on the yuan’s revaluation reform in July 2005.

Wednesday’s value surge marks a steep rise of 168 basic points from Tuesday’s 6.4335 yuan trading one U.S. dollar. So far this year, China’s currency has appreciated by about 3 percent.

Most Chinese experts predict that Beijing would allow an appreciation of the yuan against the greenback at a magnitude higher than the 5 percent last year.

Foreign trade surplus for July hit $31.5 billion, the highest in two and a half years, thanks to higher-than-expected export growth, particularly to the European Union and emerging economies like Indonesia, Argentina, Brazil and India.

The gains in both exports and imports in July – hitting $318 billion according to the General Administration of Customs – tell that China’s economy remains on a solid track, which will give the authorities in Beijing replenished confidence to raise the value of the yuan, experts say.

The $31.5 billion monthly trade surplus is the highest since February 2009 and has come at a time when the world’s second largest economy faces uncertain outside demand, typically from sputtering economic engines in the U.S and Japan.

As a countermeasure to independent rating agency, the Standard & Poor’s, downgrading U.S. government credit from the top-notch AAA to AA+ for the first time in history, the Federal Reserve came out Tuesday with a surprise policy statement, asserting America will extend its extremely low interest rates through 2013.

The U.S. central bank hinted it could also launch another round of “quantitative easing” by purchasing more government bonds.

Chinese analysts believe that if QE3 is started, a considerable proportion of the generated credit will flow to China, like QE2, attracted by China’s solid growth and higher interest rates.

To thwart the flooding-in of the hot money, Beijing will be forced to increase the value of the yuan, experts say. China’s central bank has amassed a total of more than $3.2 trillion in foreign currency reserves by June this year. The accelerated hot money inflows have ratcheted up yuan supplies to the market as the central bank has to buy them with local currencies.

China faces rising pressure of inflation as inflation has kept building up this year. It reached a 37-month high of 6.5 percent in July.

(Source: People’s Daily Online)

Chinese investment, a real threat to U.S. national security? [Aug 27, 2010]

BEIJING, Aug. 27 (Xinhua) — The United States has repeatedly blocked investment from Chinese companies on national security grounds, a protectionist move that will only harm its own interests, analysts say.

Eight U.S. congressmen recently asked the Obama administration to scrutinize a deal between Chinese telecom equipment giant Huawei and the American operator Sprint Nextelon national security grounds.

It was not the first time Huawei’s attempts to break into the U.S. market have been stymied. Earlier its buyout attempt of 3Com was summarily dismissed by the U.S. government.

Citing national security concerns again, a bipartisan group of 50 lawmakers in July requested that the government investigate an investment project of China’s Anshan Iron and Steel Group(Ansteel), China’s fourth largest steelmaker, which plans to establish a joint rebar venture with a U.S. partner in Mississippi.

“It is inappropriate for some U.S. lawmakers to label regular business behavior as a move that threatens national security,” Yao Jian, a spokesman for the Ministry of Commerce, recently said about Ansteel’s investment plan.

“I hope the United States can create a better investment environment for Chinese enterprises,” he said.

Chinese analysts said the actions were sheer protectionism, adding that national security concerns is only a lame excuse by U.S. authorities, whose true intention is to protect the interests of domestic enterprises and industries.

Moreover, standing up to China’s allegedly unfair trade practices can easily earn the congressmen much needed political chips in the upcoming mid-term election in November, the analysts said.

The setback that Huawei and Ansteel suffered is only the tip of the iceberg. Actually, blocking investment from Chinese companies in the name of national security has morphed into a knee-jerk reaction that could only harm America’s own interests.

Emcore Corporation, a U.S. fiber optics producer, announced in late June that it has abandoned a joint venture in partnership with China’s Tangshan Caofeidian Investment Corporationbecause the Committee on Foreign Investment in the United States “has certain regulatory concerns about the transaction.”

Another State-owned enterprise, Northwest Nonferrous International Investment Company, was also forced to withdraw a purchase of 51 percent stake in Firstgold Corp., a gold mining firm located near a U.S. military base in Nevada.

“Some U.S. politicians still see China through tinted glasses,” said Chen Fengying, a senior strategist with the China Institute of Contemporary International Relations.

In their eyes, China is still a planned economy under a totalitarian regime, she said.

“As a result, they begin to politicize Chinese investment and make it become an issue of security even before Chinese companies carry out any business activities there,” she said, “It is not fair for the Chinese enterprises,” whose regular business behavior has been constantly mischaracterized.

Chen said that compared with the difficulties Chinese firms face in the United States, it is much easier for American companies to invest in China.

According to Ministry of Commerce officials, U.S. companies operating in China report annual profits of at least 80 billion U.S. dollars.

By last June, the total number of U.S. investment projects in China had exceeded 57,000 and the value of accumulated U.S. investment in China reached 61 billion dollars.

According to the American Chamber of Commerce in China’s 2009 White Paper, about 74 percent of American businesses in China made profits and 91 percent chose to stay in China to expand their business.

On the other hand however, the total value of accumulated Chinese direct investment in the U.S. was only 3.1 billion dollars by last June, according to ministry statistics.

Chen said opening the American market wider to Chinese companies will definitely create many more job opportunities in the United States, a fact that U.S. politicians can’t afford to ignore as the country is still haunted by an unemployment rate as high as 9.3 percent.

American politicians should abandon their bias and discrimination against Chinese enterprises and free themselves from the Cold War mentality, Chen said.

“After, solving the problem of unemployment could bring much more tangible benefits for the American people,” she said.

Note that this is in sharp contrast to the current state of Chinese direct investments in other parts of the world:
China-Qatar cooperation benefits both countries [Xinhua, June 23, 2008]
Tenth anniversary of China-Africa forum observed in Egypt [Xinhua, Nov 11, 2010]

Chinese direct investment in Africa increased from 210 million dollars in 2000 to 1.44 billion dollars [?yearly?] in 2009, according to Song [Aiguo, Chinese new ambassador to Egypt]. More than 2,000 Chinese enterprises have set up branches in the continent.

Cooperation benefits all people [China Daily via Xinhuanet, Nov 7, 2011]

Chinese investment in Africa has expanded steadily. In 2008, Chinese direct investment in the continent amounted to 5.49 billion dollars. The existing stock of investment had reached 7.8 billion dollars and more than 1,600 Chinese companies had invested in Africa by 2008, covering a wide range of areas from product processing to agricultural development. Substantial progress has been made in infrastructure cooperation.

Chinese enterprises have undertaken the construction of some major projects in Africa, including the east-west expressway in Algeria, the expansion of the Lobito Port in Angola and the Bui hydro-power station in Ghana, which have been widely applauded by local governments and people. After years of efforts, China-Africa trade and economic cooperation has shifted towards a diversified and interactive pattern encompassing trade, investment, aid and project contracting, playing an irreplaceable role in the economic development of both sides.

Sino-Russian trade back on fast track: officials [Xinhua, Aug 20, 2010]

Mutual investments also surged this year, as Chinese direct investment to Russia jumped 58.5 percent during the first half of 2010and the Russian investment to China up 18.3 percent, they said.

Russia is interested in continuing cooperation in such areas as electric power, nuclear energy, logistic infrastructure, [Russia’s Economic Development Minister Elvira] Nabiullina said.

Chen [Deming her Chinese counterpart] said Chinese companies are willing to increase investment in Russian enterprises and to take part in their infrastructure construction.

He noted that China would take active measures to promote the import of Russian mechanical and electrical products, and also hopes that in return Russia will open its market to more Chinese cars.

– Full text: Report on China’s economic, social development plan [Xinhua, March 17, 2011]
5. Reform and opening up were further intensified.

We vigorously implemented the “go global” strategy and made further progress in a number of major outward investment projects. Non-financial outward direct investment for the year amounted to $59 billion, an increase of 36.3%.

– Full Text: Report on China’s national economic, social development plan [Xinhua, March 16, 2010]
6. Reform and opening up continued to deepen.

China’ s foreign exchange reserves stood at $2.3992 trillion at the end of 2009, an increase of $453.1 billion year on year. Outbound investment cooperation soared despite the financial crisis, with new progress made in joint exploitation of energy and resources, overseas mergers and acquisitions, contracted projects and labor services. Chinese direct investment (excluding financial sector investment) in other countries reached $43.3 billion in 2009, an increase of 6.5%, and the volume of business in overseas contracted projects amounted to $77.7 billion, an increase of 37.3%.

– Full Text: China’s economic, social development plan [Xinhua, March 20, 2008]
Special Report: NPC, CPPCC Annual Sessions 2008

Chinese enterprises did more investing overseas and increased cooperation with foreign companies, resulting in Chinese direct investment in other countries, excluding financial investment, reaching US$18.7 billion in 2007, an increase of 6.2% over the previous year.

Hu’s visit to further promote Sino-Vietnamese ties [Xinhuanet, Oct 30, 2005]

By September 2005, Chinese direct investment in Vietnam rose to 710 million dollarswith 346 projects.

The two countries are implementing a series of cooperative projects using preferential loans offered by the Chinese government, such as those in the Thai Nguyen Iron and Steel Plant and the Bac Giang Fertilizer Factory.

Huawei’s IDEOS U8150 smartphone for US$86 in Kenya: 350,000 units sold in 8 months

The current KShs7,999 [US$86 as of today’s rate] price is a heavy discount of its original price of KShs14,999 [US$161 as of today’s rate]. Note that in non-African countries the phone is sold at near the list price, e.g. the list price in India is Rs 8,499 [US$188 as of today’s rate] while a street price is Rs 8,237 [US$182 as of today’s rate].

The original pricing was between US$100 and US$200, depending on the market and it was celebrated as the achievement of their goal from early 2010 of developing a US$150 smartphone (see the Sept’10 announcement below for both). The heavy discount used in Kenya therefore could be still a little higher than their cost.

Update: Considering all that and after PCs and cloud clients are not parts of Hewlett-Packard’s strategy anymore [Aug 19, 2011] there is no wonder that a blogpost has appeared with apt headline of Has “Wintel” been replaced by “Quadroid”? [Aug 19, 2011] in which an excerpt from a 9 months old CCNMoney article called Android and Qualcomm are the new Wintel [Nov 12, 2010] has been included. Here it is worth to cite just this part from that:

At least a dozen handset makers have brought to market more than 90 different smartphones that run Android, and more than three quarters of those handsets have Qualcomm chips embedded in them, according to a new study by consultancy PRTM.

The Qualcomm-Android standard, or “Quadroid” as PRTM calls it, is becoming a parallel to the Windows-Intel, or “Wintel,” standard that developed in the 1990s.

Like with Wintel PCs, Quadroid devices’ software and hardware is essentially a commodity — they’re very similar on every phone, making differentiation a difficult task. Form factor is still a battleground — some people want keyboards, some don’t — but drop past the top-tier of the very newest devices and the distinctions are tiny. Kickstands, dual screens, very high resolution cameras and OLED touchscreens are among the features Quadroid smartphone makers are using to set themselves apart.

With Huawei’s smartphones we are witnessing exactly this:

A slightly modified version, Huawei U8160 (see the picture on the right) is sold since May under Vodafone brand as Vodafone 858 Smart (see the specs as well where HSPA (3.6Mbps) only is indicated although using the same Qualcomm MSM 7225 SoC announced in Feb’07 and first delivered in 3G phones in June’07). It is sold at around rock bottom US$120 (22,290.00 HUF in my country). See also: Huawei U8160 is rebranded to the budget friendly Vodafone Smart [May 16, 2011] as well as the Vodafone 858 Smart review [Aug 1, 2011].

There is also a this year version called IDEOS X1 which is according to T-Mobile Rapport with Android coming soon (it’s a re-branded Huawei U8180) [July 21, 2011]:

Already released in the UK as Orange Stockholm, the Huawei U8180 X1 [also called Gaga] will be available via T-Mobile, too. Apparently, T-Mobile will sell the handset under the T-Mobile Rapport name – that’s what the Bluetooth SIG is suggesting anyway.

The specification is the same but its design is improved. Already sold in Australia for $99.

Taiwan market: China-based Huawei Device to launch IDEOS X1 smartphone [Aug 23, 2011]

Huawei Device, a China-based vendor and subsidiary of Huawei Technologies, and Taiwan mobile telecom carrier Far EasTone Telecommunications (FET) on August 22 jointly unveiled IDEOS X1, the former’s smartphone model, for launch in the Taiwan market later in August through the latter’s retail network at a contract-free price of NT$4,990 (US$172) or zero price bundled with a 24-month contract, according to FET.

IDEOS X1 features a Qualcomm MSM7227-1 600MHz processor, Android 2.2, WCDMA/GSM/GPRS and HSDPA 7.2Mbps voice/data communication standards, a 2.8-inch QVGA 262,000-pixel screen, a 3.2-megapixel rear camera, video formats of H.263/H.264 and MPEG4, a dimension of 104 (H) x 56 (W) x 13 (D)mm and a weight of 100 grams.

Huawei announced the IDEOS X3 smartphone at MWC’11 as well (but only delivered since June’11, for around US$240 in Singapore and for around US$200 in Malaysia). This is using the 7225 follow-up Qualcomm MSM7227 SoC (announced in Feb’09 for sub-$150 smartphones).

Qualcomm chips kernel ARM – from phones to laptops [Feb 17, 2009]

MSM7227 is an evolution of the two years ago, MSM7225, repeating its size (12 x 12 mm) and maintaining consistency of contact, which provides designers the opportunity to further develop the existing developments. Working frequency ARM11 core in MSM7227 increased to 600 MHz (against 528 MHz of the predecessor), the core of the signal processor (DSP) operating at 320 MHz, and the nucleus of the communications processor – at a frequency of 400 MHz. As before, there are features hardware acceleration of graphics and coding/decoding video WQVGA with frequency 30 frames per second and support for GPS, but now supported by the camera modules with up to 8-megapixel (v. 5), and the realization had grown up with a Bluetooth version 2. 0 to 2. 1.

There is only on exception from this Quadroid dominance even for Huawei:
For the mainland China Market there is also the Huawei T8300 which is the TD-SCDMA specific redesign of X3 since the MSM7227 was not able to support TD-SCDMA so the only available SoC was Marvell’s PXA920/918 SoCs family available since Sep’09 (although capable of passing the rigorous TD-SCDMA tests only almost 2 years later). For more info on China specific TD-SCDMA entry-level smartphones see: Marvell’s single chip TD-SCDMA solutions beaten (again) by two-chip solutions of Chinese vendors [July 11, 2011].

Update: The PXA920 opportunity was realized widely only in September 2011, two years later than the September 2009 launch. See:First real chances for Marvell on the tablet and smartphone fronts [Aug 21, 2011]

End of Updates

This is — according to Singularity Hub — opening huge opportunities for African app development as well:

The Android app business is a tough one, but keeping in mind that the smartphone is Africa’s laptop killer, it’s also one of the most exciting platforms for the continent’s developers.

Case in point. An entrepreneurial conference in Nairobi called Pivot25 showcased some of the most innovative Android apps in East Africa. Among these include M-Farm, an app that allows farmers to broadcast product prices and locations to the world via SMS. Another agri-app developed by Makerere University helps diagnose and track the spread of crop diseases via crowdsourcing. In a nation where agriculture accounts for nearly a quarter of GDP, apps like these could prove invaluable in maximizing harvests and facilitating the spread of precision farming.

While agri-apps are well-suited for the developing economies, the winner of Pivot25 was Medkenya. It’s the functional equivalent to WebMD in that it puts a library of health information at the user’s fingertips and performs other helpful tasks like guiding the ill to hospitals. However,  I have a hunch that this is just the beginning of healthcare-related apps in Africa. We’ve seen smartphones adopt all kinds of medical technology, from digital stethoscopes to cancer diagnosis, and I’m hopeful that we’ll see similarly stunning med-tech reach even the remotest areas one day. An app that tracks mosquito outbreaks or a smartphone with an HIV-testing peripheral would work wonders to address persisting healthcare challenges of the developing world. Who knows? Maybe one day they’ll be able to carry a doctor around in their pocket.

Cheap Android phone selling fast [IT News Africa, Aug 17, 2011]

Huawei Ideos by Safaricom in Kenya -- 17-Aug-2011When Huawei assistant director for African expansion, Wang Liu, talked about developing a cheap Android phone for the African market, he knew it would be successful. But after the Chinese company launched the IDEOS phone earlier this year via Kenya’s Safaricom, the results were better than they could have imagined.

“We knew it would be successful and thought it would take some time to get moving, but the statistics coming in are amazing,” Liu said.

According to Safaricom, the $80 Android phone has been sold to over 350,000. That is a staggering statistic considering nearly half of Kenya’s population lives on less than two dollars per day.

Liu said the key to the success was to bring the price down so it would be affordable to the growing middle-class in Kenya. When they were able to do that, joining with Safaricom was the solution to their distribution needs.

“We knew that if we could get the price down and make it cheap enough for people to get, lots would get out there because Android and smartphones are the future and people want the latest technology,” Liu said from Shanghai.

Kenya’s mobile market is booming and with the economy growing at some five percent annually, Huawei expects more and more Androids to be purchased in the coming months.

Huawei IDEOS is Top Smart Phone in Kenya [Huawei in Africa press release, May 17, 2011]

Huawei, a leader in providing innovative telecommunication solutions for operators around the world has today announced that the Huawei IDEOS is the most popular smart phone in Kenya for the first quarter of 2011.

This is also according to a report by GFK Retail and Technology, one of the world’s leading independent market researcher tracking sales data in technical consumer goods and entertainment in over 80 countries worldwide. The IDEOS was launched during the 2010 Christmas period with the phone gaining wide acceptance in the market.

Mr. Herman He, CEO Huawei announced that, “Since the IDEOS launch five months ago, so far over 60,000 pieces have been sold and we are moving towards the 100,000 piece mark with its share of the local smartphone market at 45% in the first quarter of the year, making it the top selling device with February alone reaching 73%.”

“We are delighted by the IDEOs’ outstanding performance and we hereby affirm our commitment to continue providing quality and affordable products to Kenyans”. Mr. He added.

Mr. He also said that Delivering connectivity for users’ thorough smart devices was one of Huawei’s core objectives for 2011, with the IDEOS devices designed to provide smart and efficient connectivity to deliver a simple and premium end user experience .

The success has partly been attributed to a strategic partnership with Safaricom as the main distributor and marketer of the smart phone, Google for their Android 2.2platform, and QUALCOMM for the chipsets.

Safaricom Head of Retail Morris Maina said the partnership was a major win for Kenyan consumers and presented a strategic fit for Safaricom in its quest to drive up data uptake by availing affordable internet enabled devices. The phone retails at KShs8,499 [US$91 as of today’s rate], a KShs6,500 discount on its original price of KShs14,999 [US$161 as of today’s rate]. It also comes with free 600MB Safaricom data and Kshs1,000 worth of Safaricom airtime.

“Safaricom believes that innovations and value proposition will be key in winning consumers as the market becomes increasingly competitive. We are thus happy to be in a partnership that subscribes to these tenets and understands that affordability is key in a market like Kenya. The availability and increased take-up of this device opens a new world of immense possibilities to our subscribers and greatly increases the utility they can derive from our network, the only one with 3G capability in the market,” said Mr Maina.

Information and Communication Permanent Secretary Dr. Bitange Ndemo noted that the mobile phone has permeated every sphere of life in Kenya.
“In the beginning of the 21st century, the mobile telephone was the reserve of an elite few and the gadget’s sole purpose was to make phone calls and send text messages. Today, all this has changed and the mobile phone is no longer a luxury but a necessity,” said Dr. Ndemo.

“By morphing and adopting into various aspects of our lives, the mobile phone has gone beyond its original purpose of phone calls and text messages and it now serves as a bank, a computer a radio and a television set among other things. In a nutshell, it has penetrated every aspect of our lives,” he added.

Huawei Device is affiliated with Huawei Technologies Co., Ltd. and is one of Huawei’s four business units. Huawei Device products cover a wide range of series, including mobile phones, Mobile Broadband, Convergence Terminal, Fixed Network CPE, and Video Products. Huawei Device now serves 48 of the world’s top 50 telecom operators, and it has established strategic partner relationship with world-leading operators.

In 2010, Huawei Device sold more than 5 million Android phones ranking the world’s Top 5.Star products: Avatar U8850 (Flagship, high definition, high speed, super slim, 9.9 mm thick, 3.7″ LCD) Blaze U8510 (Elite, first Android Gingerbread phone, 3.2″ LCD) Boulder U8350 (Elite, the thinnest QWERTY touch screen Android phone, 9.9 mm thick)

Huawei Launches World’ s First Affordable Smartphone with Google Called IDEOS [Sept 2, 2010]

Huawei, a leader in providing next-generation telecommunications network solutions for operators around the world, today announced the launch of IDEOSTM, an affordable smartphone powered by the latest iteration of AndroidTM 2.2 (also known as ‘Froyo’ ). The smartphone is priced between US$100 and US$200, depending on the market. IDEOS redefines the “entry-level” concept by combining high-quality hardware and software with a high price-to-performance ratio. IDEOS will be released in a number of countries across Europe, Asia-Pacific, North America and Latin America.

The ergonomically designed IDEOS provides a variety of ways to access the Internet, as it boasts downlink speeds of more than 7.2Mb/s, offers WCDMA + WiFi dual network support, and offers ubiquitous mobile broadband services. The device also doubles as a WiFi router for up to eight devices at a time, making IDEOS an all-in-one solution for a range of wireless connectivity options.

Available in black, yellow, blue, and purple, the IDEOS, with Android 2.2 pre-installed, not only runs fast, but also supports functions such as voice dialing, voice navigation, and the ability to run applications off the SD card. With more than 70,000 applications available in the Android Market, IDEOS provides a wide range of communication, entertainment, office, and financial management applications.

Kevin Tao, CEO of Huawei Device, said, “The popularity of the smartphone is one of the key tools to bringing people into the ‘Golden Age of Mobile Broadband,’ which is linked to Google’ s mobile Internet strategy.

“We are proud to have already achieved our goal from early 2010 of developing a US$150 smartphonewith an excellent user experience. The IDEOS is an affordable option, designed to lower barriers to entry to allow easy mobile Internet access.”

The name “IDEOS” embodies creativity and inspiration: the “ID” represents the industrial design-centric hardware platform, the “OS” represents the operating system as the core software platform, and the “E” symbolizes the evolution to mobile Internet.

See the official specification of the IDEOS U8150 on Huawei’s site.
The processor [rather SoC] used there is Qualcomm MSM 7225 (announced in Feb’07 and first delivered in 3G phones in June’07), with a single 528 MHz ARM1136EJ-S core and embedded QDSP5000 DSP (GSM, GPRS/EGPRS Multislot Class 12, EDGE, UMTS Release 6, 7.2 Mbps HSDPA, HSUPA 5.76 Mbps, MBMS baseband).

Huawei brings entry-level Android smartphone to Africa [IT News Africa, Nov 17, 2010]


Huawei launches IDEOS for African market

Leo Wang, Managing Director Eastern and Southern Africa Region, Terminal Business Development at Huawei Technologies, talked to ITNewsAfrica.com about Huawei’s partnersip with Google and the latest additions to its IDEOS smartphone range.

ITNewsAfrica.com: What is the latest addition to the Huawei device range?

Leo Wang: We launched our own brand IDEOS in the African market, with the latest addition an entry-level touch screen smartphone with Google’s Android 2.2 OS and 3G connectivity. We had previously launched IDEOS in rural markets in Germany in September this year and in UK, USA, China, with Africa and India being now the next targets. Worldwide, since September we have promoted IDEOS in 30 countries, with over one million units already soldthrough local operators.

ITNewsAfrica.com: What are your expectations of IDEOS in the African market for next year?

Leo Wang: This is the first entry-level 3G smartphone in Africa that offers a true smartphone experience thanks to the Google Android’s interactivity. We expect 5-7 percent of the African market to benefit directly from this, but now quantity is not as important to us as establishing the IDEOS brand. We have continuously launched smartphones and tablet devices under IDEOS brand and we have offerings for every segment of the market, be it entry-level or middle and high income. As an example, for high-end markets we have included touchscreen devices with QWERTY, multi-point touch controls and HD video output. Most of our smartphones have Android OS, through our partnership with Google.

ITNewsAfrica.com: How do you justify Android OS as your first choice for IDEOS?

Leo Wang: We are among the top three Google partners in the device market. Our close partnership is not exclusive, but offers access to the Android OS, which is an open platform with a rapidly growing application market, something we found attractive. Also, Google branding takes IDEOS to a completely new level and ensures the device’s quality and operability is of high standards.

ITNewsAfrica.com: Will Huawei develop LTE devices in the near future? And if so, when will they get to Africa?

Leo Wang: We will launch LTE devices in the next quarter for the international markets. We have already been testing LTE and WiMAX technologies globally. In Africa, discussing and testing with main operators such as MTN and Vodacom will be a starting point.

Supply chain battles for much improved levels of price/performance competitiveness

Current snapshot:

Intel rejects 50% Ultrabook CPU price cut demand from notebook players [Aug 16, 2011]

Intel’s Oak Trail platform, paired Atom Z670 CPU (US$75) with SM35 chipsets (US$20) for tablet PC machine, is priced at US$95, already accounting for about 40% of the total cost of a tablet PC, even with a 70-80% discount, the platform is still far less attractive than Nvidia’s Tegra 2 at around US$20. Although players such as Asustek Computer and Acer have launched models with the platform for the enterprise market, their machines’ high price still significantly limit their sales, the sources noted.

As for Ultrabook CPUs, Intel is only willing to provide marketing subsides and 20% discount to the first-tier players, reducing the Core i7-2677 to US$317, Core i7-2637 to US$289 and Core i5-2557 to US$250.

As for Intel’s insistence, the sources believe that Intel is concerned that once it agrees to reduce the price, the company may have difficulties to maintain gross margins in the 60% range and even after passing the crisis, the company may have difficulty in maintaining its pricing. Even with Intel able to maintain a high gross margin through its server platform, expecting Intel to drop CPU prices may be difficult to achieve, the sources added.

Update: ASUStek seems to maneuver by far the best among them (special early ultrabook engagement with Intel, with popssible higher discount, in addition to exploiting the Tegra 2 opportunity best via the only successful so far EeePad Transformer):
Asustek expects better business performance in 2H11 [Aug 17, 2011]

Asustek Computer expects its performance in the second half of 2011 to be better than that of fellow Taiwan-based companies, according to CFO David Chang.

Asustek is likely to hit record quarterly revenues in the third  quarter and is optimistic about business operation in the fourth mainly due to the launch of second-generation Eee Pad Transformer tablets and ultrabook notebooks, Chang said.

Asustek aims at a 14% market share for notebooks in China, and
became the largest vendor in Eastern Europe’s notebook market in the second quarter. In addition, Asustek is poised to make forays into Latin America, especially Brazil and Mexico.

Asustek expects to ship 14 million notebooks and 4.5-5 million Eee PCs in 2011, Chang indicated. Asustek shipped 11.4 million motherboards in the first half and expects to ship 22.5-23 million for the year.

Tablet players expected to cut price to digest inventory overstock [Aug 16, 2011]

Non-Apple tablet PC players, facing the fact their devices are having weaker sales than their order volumes, while demand from the retail channel has been quickly shrinking, are expected to start cutting their tablet prices by the end of September to digest inventory and minimize losses, and the decisions are expected to trigger a new price war within the tablet industry, according to sources from notebook players.

The sources pointed out that most non-Apple tablet players had weaker-than-expected performances and Asustek, which had a rather better performance, had shipments of 700,000 tablets from May to July with actual sales only reaching 500,000 units.

RIM and High Tech Computer (HTC) are already placing their hopes in 2012 with Samsung and Motorola both seeing their tablet demand weaker than expected, while some other players such as Acer are gradually reducing their orders.

Motorola, Hewlett-Packard (HP), Asustek and Acer have all recently reduced their tablet prices with the lowest price currently at US$370; however, with their inventory will become harder to digest, the sources believe there will be at least two waves of price cuts from the end of September to the year-end holiday, reducing the tablet average price level to US$350 and may even drop further to US$300 in the future.

More: Acer & Asus: Compensating lower PC sales by tablet PC push[March 29, 2011 with updates upto Aug 2, 2011]

AMD’s Bright Outlook Likely to Boost Taiwan’s Supply Chain [Aug 16, 2011]

Taiwan’s IC supply chain is expected to benefit from good business performance of Advanced Micro Devices Inc. (AMD), which is projected to outperform archrival Intel Corp. in the third quarter with increased shipment of accelerated processing units (APUs).

The Taiwan supply chin is mainly composed of manufacturers including foundry Taiwan Semiconductor Manufacturing Co. (TSMC), packager Siliconware Precision Industries Co., Ltd., tester STATS ChipPAC Taiwan Semiconductor Corp., and substrate maker Nanya Printed Circuit Board Corp.

AMD estimates its revenue for the third quarter to rise 8-12% from the second quarter, compared with Intel’s projected 8% revenue growth. According to AMD, it has enjoyed robust APU shipments since the second quarter, with both its PC and laptop APU shipments hit new highs.

AMD has contracted TSMC, currently the world’s No.1 pure foundry, to make its Ontario [C-series], Zacate [E-series], and Desna [Z-series, specific for tablet PCs, a power optimized version of C-series, which are also for ultra-thin notebooks: Z-01 of 5.9W vs. C-50 9W in both cases with two 1 GHz “Bobcat” CPU cores + 6250 GPU] processors using 40-nanometer process technology as well as its Hudson chips using 65nm process technology.

While increasing foundry outsourcing to TSMC, AMD has augmented packaging and testing contracts to Taiwan’s providers as well. Nanya is also expected to land contracts via Japanese partner NGK Spark Plug, which has directly received substrate contracts from AMD.

In the second quarter, AMD saw its revenue slightly dip 2% from the first quarter to US$1.57 billion, while its gross margin was 46%, up from 45% recorded in the first quarter this year.

AMD Llano processor shipments reach 1.3-1.5 million units in July [Aug 4, 2011]

AMD shipped about one million Llano [A-series, for mainstream notebooks, all-in-one PCs and desktop PCs: with up to four up to 2.9 GHz x86 CPU cores and with an integrated DirectX 11-capable discrete-level graphics unit that features up to 400 Radeon cores along with dedicated HD video processing on a single chip] APUs in June and 1.3-1.5 million units in July, and with the appearance of the company’s new Llano APUs in the fourth quarter, annual shipments of Llano in 2011 should reach 7.5-8 million units, according to sources from motherboard players.

The sources pointed out that AMD is pushing its 40nm-based C series (Ontario) and E series (Zacate) APUs for the entry-level market, while it is pushing 32nm-based Llano-based APUs for the mid-range to performance and mainstream markets, and is pushing 32nm AM3+ FX series (Zambezi) processors for the high-end market in the fourth quarter.

In 2012, AMD will launch a new APU series codenamed Krishna using a 28nm process from Taiwan Semiconductor Manufacturing Company (TSMC), targeting mini PCs, and all-in-one PCs with an APU series codenamed Trinity to replace Llano for the mainstream market, adopting a 32nm process from Globalfoundries. For the high-end market, AMD will launch an APU series codenamed Komodo.

AMD shipping Llano APUs; prices leaked [May 23, 2011]

AMD has started shipping its Llano APUs to notebook clients and will begin to market the APUs to channels in July 2011, according to sources from notebook makers.

AMD targets to ship one million notebook-use Llano APUs in June, 1.5 million in July, and a total of 8-9 million for the whole of 2011, revealed the sources, citing AMD’s internal estimates.

If the shipment goals are realized, AMD will be able to boost its share in the notebook CPU segment to 15% by the end of the year, the sources commented.

Additionally, AMD will also launch six Llano and four Bulldozer APUs for desktops.

AMD: Llano and Bulldozer APU prices (k unit)
Core Model Price Competing Intel model
Llano/quad-core A8-3550P US$170 Core i5-2300
Llano/quad-core A8-3550 US$150
Llano/quad-core A6-3450P US$130 Core i3-2120/2010
Llano/quad core A6-3450 US$110
Llano/dual-core A4-3350P US$80 Pentium G6960/6950 and Sandy Bridge G800/600
Llano/dual core E2-3250 US$70 Pentium G620
Bulldozer/octo-core FX-8130P US$320 Core i7 2600K/2600
Bulldozer/octo-core FX-8130 US$290
Bulldozer/6-core FX-6110 US$240 Core i5 2500K/2500
Bulldozer/quad-core FX-4110 US$220

More: Acer repositioning for the post Wintel era starting with AMD Fusion APUs[June 17, 2011]

Apple cancels supply schedule of iPad 3 for 2H11 [Aug 16, 2011]

US-based tablet PC players Apple has recently canceled its iPad 3 supply schedule for the second half of 2011, forcing other tablet PC brand vendors that are set to launch same-level product to compete, to follow suit and delay their launch; however, supply of the iPad 2 in the second half will still be maintained at 28-30 million units, according to sources from the upstream supply chain.

Apple was originally set to launch its iPad 3 in the second half of 2011 with a supply volume of 1.5-2 million units in the third quarter and 5-6 million in the fourth quarter, but Apple’s supply chain partners have recently discovered that the related figures have all already been deleted, the sources pointed out.

The sources believe that the yield rate of the 9.7-inch panel that feature resolution of 2,048 by 1,536 may be the major reason of the supply delay since such panels are mainly supplied by Japan-based Sharp with a high price and Apple’s other supply partners Samsung Electronics and LG Display are both unable to reach a good yield. Since Apple is unable to control a certain level of supply volume, the iPad 3 is unlikely to be mass produced as scheduled, the sources added.

Sources from panel players also pointed out that the 9.7-inch panel with high resolution requires a much larger backlight source and a single edge light bar is hardly able to reach satisfaction levels. Due to iPad 3’s requirements over the physical thinness, rich color support and toughness will all conflict with the panel’s technology restrictions; therefore, this could cause a delay in the launch.

In June, LG Display supplied three million panels for the iPad 2 with Samsung supplying 1-1.5 million units and Chimei Innolux (CMI) 10,000-20,000 units. In July, LG’s supply volume dropped to 2.8 million units with Samsung maintaining its same levels, and CMI’s volume increased to 450,000-500,000 units.

Update: CMI fails to become iPad 3 panel supplier, say sources [Aug 19, 2011]

Chimei Innolux (CMI) has failed to become a LCD panel supplier for the Apple iPad 3 due to technological hurdles, according to industry sources.

CMI has cut into the supply chain of iPad 2, which uses IPS panels, but the new Apple tablet is more demanding in terms of resolution, the sources said. The iPad 3 will feature a 9.7-inch panel with resolution of 2,048×1,536 compared to the iPad 2’s 1,024×768.

CMI has been developing panels trying to meet the iPad 3 specifications, but problems with transmittance and yield rates of the panels have resulted in its failure to receive certification for the iPad, the sources said.

CMI began developing IPS panels last year after receiving license from Hitachi in July 2010. The license covers IPS, Super-IPS, Advanced-Super IPS, IPS-Pro, and IPS-Pro-Prolleza.

CMI previously scheduled mass production of IPS panels to begin as early as the end of 2010 or early 2011. But low yield rates delayed the mass production until recent months. The maker’s IPS panel monthly output in July 2011 reached nearly 500,000 units. It is looking forward to an output of one million units in August 2011, the sources said.

The sources noted that the iPad 3’s resolution requirement of 2,048×1,536 pixels is also a challenge even for iPad panel regular suppliers such as LG Display (LGD) and Samsung Electronics. Apart from the two Korea makers, Japan’s Sharp has als been selected to supply panels for the iPad 3, the sources said.

They noted that CMI still stands a chance of becoming a regular supplier for iPad 3 if it can improve its panel quality to meet Apple’s requirements. The maker recently invested NT$800 million to NT$1 billion [US$28 million to US$35 million] to improve manufacturing facilities, the sources said.

Chimei Innolux Continues Suffering Loss in Q2 [Aug 16, 2011]

Chimei Innolux Corp., the largest maker of thin film transistor-liquid crystal display (TFT-LCD) panels in Taiwan, reported a loss of NT$13 billion (US$448.3 million) in the second quarter, deeper than institutional investors` forecast.

Industry sources said that the four major makers of large-sized TFT-LCD panels, i.e. AU Optronics Corp. (AUO), Chimei Innolux, Chunghwa Picture Tubes, Ltd. (CPT) and HannStar Display Corp., together reported total loss of about NT$120 billion (US$413.8 million [US$4.15 billion]) in the past about one year.

Some institutional investors said that the all-size panel prices are expected to fall slightly, implying that makers` losses in the third quarter would not be less than second quarter`s.

At its recent half-year online shareholder meeting, Chimei adjusted down its capital spending to NT$50 billion to NT$60 billion (US$1.7 billion to US$2.1 billion) from NT$75 billion to NT$70 billion (US$2.6 billion to US$2.4 billion) lowered previously and NT$100 billion (US$3.4 billion) announced in early this year. Chimei said that this year the company would focus mainly on high-level equipment and R&D projects for touch-panel technology.

AUO, Chimei Innolux`s major rival and the No. 2 panel maker in Taiwan, recently also adjusted down its capital spending goal to under NT$70 billion (US$2.4 billion) from NT$90 billion to NT$95 billion (US$3.3 billion to US$3.1 billion).

Chimei Innolux is a merger between three companies, including Chi Mei Optoelectronics Corp. (CMO), Innolux Display Corp., and TPO Displays Corp. (TPO), formed in the second quarter of 2010, and began reporting loss starting the third quarter of last year that has continued for four seasons.

AUO reported an accumulated loss of NT$36 billion (US$1.24 billion) in the past three quarters.

Eddie Chen, Chimei Innolux`s chief financial officer, said that his company focused on shipments of core businesses and cut many system assembly works in the second quarter. The company`s second-quarter shipments of large-sized panels increased about 10% quarter-on-quarter (QoQ), but its revenue generated from small/medium-sized panels fell 18.4% QoQ due to the falling panel prices. J.C. Wang, president of Chimei Innolux`s Southern Taiwan Science Park (STSP) branch, pointed out that his company decided to cut system-assembly business because it takes too many labor forces and that`s not his company`s core competitiveness.

Wang said that the third quarter is a traditional high season, but the market now seems relatively weaker than it should be. In the second quarter, Chimei Innolux`s capacity utilization rate was about 80%, the company said that it would adjust according to market conditions.

LCD maker CPT still deep in red in second quarter [July 30, 2011]

LCD panel maker Chunghwa Picture Tubes Ltd (CPT, 中華映管) yesterday reported its 12th consecutive quarterly loss as prices for slim-screen panels for televisions and computers dropped on sluggish end demand.

The company added that outlook for the third quarter remained sluggish, with demand expected to fall below the seasonal norm.

However, Chunghwa Picture said it has no plans to cut its capital spending this year of between NT$2 billion (US$69 million) and NT$2.5 billion, which would be used to improve its equipment to produce high-definition flat panels used in tablet devices and smartphones.

Earlier this week, its bigger local rival, AU Optronics Corp (友達光電), said it planned to slash capital spending by 30 percent.

In the quarter ending June 30, Chunghwa Picture’s losses widened to NT$3.13 billion [US$108 million] from losses of NT$2.33 billion [US$80 million] in the first quarter. The Taoyuan-based company posted losses of NT$1.5 billion in the second quarter of last year.

“Market demand, especially for TVs and IT products [computers], slumped in the first half. Oversupply caused panel prices to drop further,” company president Lin Sheng-chang (林盛昌) said during a teleconference with investors.

“As the visibility for IT panels is unclear, we will make inventory management our priority,” Lin said.

Days of inventory increased to 37 days last quarter from 31 days in the first quarter, the company said.

The fragile economic recovery in the US and Europe is expected to curtail demand for consumer electronics, while demand for notebook computers should pick up slightly after new models hit the shelves, Chunghwa Picture said.

To combat these difficult times, Lin said the company would have to accelerate its shift to high-margin products, such as tablet panels, touch sensors and smartphone screens, in the second half.

Its newly formed strategic partnership with the world’s biggest e-paper display supplier, E Ink Holdings Inc (元太科技), will help it reach this goal, Lin said.

Last week, E Ink agreed to spend NT$1.5 billion [US$52 million] to subscribe to Chunghwa Picture bonds. Chunghwa Picture agreed to supply LCD panels to E Ink.

Besides e-paper displays, E Ink also supplies high-definition flat panels to LG Display and tablet device makers.

Shipments of LCD panels used in smartphones, tablets and consumer electronics should grow by 20 percent to 25 percent in the second half, from 200 million units shipped in the first half, Lin said.

Last quarter, revenues from small-and-medium LCD panels used in tablets and smartphones accounted for a larger share, 42 percent, of Chunghwa Picture’s total revenues of NT$15.93 billion, from 37 percent in the prior quarter, according to the company’s financial statement.

Chunghwa Picture also said it would terminate its money-losing cathode-ray-tube (CRT) business. The company plans to revamp its CRT factories in Malaysia and in Fuzhou, Fujian Province, and shift to touch panel assembly.

HannStar posts operating loss [Aug 15, 2011]

HannStar Display has announced unconsolidated results for second-quarter 2011, with total sales rising 10% sequentially to NT$1.15 billion (US$387.4 million). But it recorded an operating loss of NT$1.04 billion and a net loss of NT$ 1.57 billion [US$54 million], which was translated into a loss per share of NT$ 0.27.

Gross, operating, and net margin in the second quarter were 7%, -9%, and -14% respectively. Earnings before interest, taxes, depreciation and amortization (EBITDA) was 1%.

HannStar said the operating loss in the second quarter was the result of an effort to enlarge its manufacturing capacity in Nanjing, China, which cost it an extra NT$1.88 billion [US$65 million] in operation.

Capacity utilization of HannStar was nearly full in second-quarter 2011. Small- to medium-size panels under 10-inch took up about 45% of its total revenues. Notebook panels accounted for 10% and monitor panels 45%.

HannStar is expected to enhance notebook panels’ share to 15% and small- to medium-size panels to 55% in third-quarter 2011. Monitor panels’ share will be lowered to around 30%.

HannStar expects small- to medium-size panels’ share to reach 60% by end of 2011 and notebook panels to grow to 20%.

Explanatory excerpts from Pixel Qi’s first big name device manufacturing partner is the extremely ambitious ZTE [Feb 15, 2011, with updates up to June 3, 2011]

to engage some of the largest factories that have ever been made, and for that to work their economics need very high volumes. We need to have customers who really commit to large purchase orders almost before we start to design.”

The display business can be considered to be the worlds biggest non-profit industry, the 5 biggest LCD makers who produce 90% of the worlds LCDs, produce for $120 Billion in screens every year but can only make small profit margins out of that because of the strong competition and the large volumes shipped. Those companies that produce the worlds LCD screens have very high costs, very high risks, little flexibility.