Computex Taipei 2011 is Again Battleground for IT Heavyweights

Observers found it far easier to comment on the number of makers of OS and CPUs for mobile computing devices than continually upgraded specs at the Computex 2011 Taipei, held early June, where only two major contenders—Android-ARM and Wintel (Windows and Intel)—showed significant stage presence; while only a handful of intrepid tech-geeks could keep up to perennial battles among Taiwan's information-technology (IT) manufacturers, who tap the island's long-established capacities to outdo each other in spec-upgrading.

Apple continues to leverage success generated by its pioneers in MCD—iPad and iPhone—which, besides offering totally mobile online access and communication, seem to have become fashion accessories also marking one's Net-savvy status. So Apple's trendsetters have attracted a host of copycats to cash in on the robust demand for tablet PCs and smartphones. Vying to emulate Apple's success, search engine Google and British microprocessor maker ARM have succeeded to convince most non-Apple suppliers to install Android OS and ARM processors in their tablets and smartphones.

Initially Intel and Windows just shrugged off challenges from Android OS and ARM, which lack computing strength and complicated software that are bread-and-butter for the major CPU and OS makers. But Intel and Windows dominated the PC segment for decades, which some say may have its days numbered, that is gradually losing shares to tablets and smartphones, hence making the two major names fidgety as they try to prevail again.

Ray Chen, chief executive officer of Compal Electronics Inc. that leads the world in contract supply of laptop computers, has reduced the original 2011 shipment goal from 55 million to 48 million due to encroachment of tablet computers; while the Topology Research Institute of Taiwan, which tracks new-economy industries, predicts 50 million tablets to be shipped in 2011 and 400 million smartphones.

AMD-Intel Declining
Many market consultants have never included Intel and Microsoft as benchmarks to measure tablet and smartphone markets; while Hewllett-Packard's executive vice president for personal systems group, Todd Bradley, even says the AMD-Intel thing is “kind of over,” with HP not using Microsoft OS on its first TouchPad but its own webOS.

Over 90% of tablet PCs and smartphones are installed with ARM processors, a 32-bit reduced instruction set computer (RISC) instruction set architecture (ISA) developed by the Cambridge-headquartered ARM Holdings, as entered into over 90% of tablet PCs and smartphones, whereby RISC ISA reduces energy-consumption by the chip and results in smaller than X86-architecture microprocessors..

At a Computex 2011 Taipei forum, ARM Holdings President Tudor Brown said that 25 billion ARM microprocessors have been shipped worldwide, and the staggering volume shows the world is becoming quite connected; while the company's success relies on the steady growth of the 850 ARM-connected communities.

Continual Growth
Brown expects the PC market to grow continually despite the slowdown in the last few years. “And, interestingly, we think ARM's share of PC market is going to grow significantly. We have about 10% today and will have 15% at the end of 2011 as tablets grow. By 2015, we expect that to top 50% of the total mobile PC market.”

Brown said that Android is written for and optimized for ARM. “We still work with Google on optimization. There are 400,000 activations on Android and ARM daily, over 300 ARM-certified products on devices on the market and that number obviously continues to grow.”

While forecasting about 150 billion ARM chips worldwide by 2020 based on a connected world that is very complex and diverse, Brown said, “On one end of this scale, micro-controller is powering the Things of Internet and costing less than 50 cents. On the other end, we have servers and higher computing where chips cost over two hundred dollars. Through the supply chain from ARM processor IP right to semiconductor foundries, through ODM/OEM, distributors, and end users, many people are touched by this technology and able to evaluate it and, therefore make a profit.”

Tablets' erosion of the laptop market motivates Nvidia CEO J.S. Huang to forecast tablet shipments to exceed laptops' in five years due to several advantages. For examples, tablets can download apps via cloud computing anytime and anywhere, with tablet apps also available on PCs, which can access scant apps via cloud computing, coupled with low availability of PC apps for tablets. Huang notes popular apps as Angry Bird for mobile computing devices will incur exploding sales of tablet computers.

In addition, Huang expects tablets to drive replacement buys with consumers likely to trade in old machines for new ones in one year, adding that the laptop replacement cycle is relatively longer, while PC users tend to tablets but not vice versa.

Controlling only around 5% of the global MCD segment, Intel is trying to remedy such scenario. At Computex 2011 Taipei, executive vice president of Intel and general manager of Intel architecture group, Sean Maloney, launched a high-profile promotion of the company's ultra-thin laptop architecture “Ultrabook” in cooperation with several Taiwanese PC heavyweights including Asustek Computer Inc.

According to Intel, Ultrabook is not a pure netbook nor a dedicated tablet, but a combination cashing in on the faster processing speeds of PCs as well as the thin, light designs of tablets, with the new MCD being less than 20 millimeters thick, as energy-efficient as tablets, fast to switch on and off, and offering Net access on-the-go.

The Ultrabook is said to be Intel's latest product to better compete in the MCD segment where it is caught offguard by the sudden popularity of tablets, which are based on chip designed by competitor ARM. However, Mooly Eden, vice president and general manager of Intel's PC client group, stresses that the Ultrabook rollout does not concede Intel's failure in the tablet market albeit admitting to being late.

Intel expects Ultrabooks to account for 40% of consumer laptop sales by the end of 2012. Performance and life of Ultrabooks are expected to increase next year when Intel launches its Ivy Bridge processors. In 2013, Intel microprocessors will consume only half the power consumed in today's laptops to likely drive popularity of Ultrabooks.

Asustek Unveils UX21
Showing up to support the Ultrabook promotion, Asustek chairman Johnny Shih unveiled the firm's first Ultrabook computer, UX21, which is ultra thin, responsive and powerful, noting the computer is 3mm to 6mm thin, reactivates from hibernation in five to six seconds, and from 7-day hibernation in only two seconds.

Asustek CEO Jerry Shen said the company's UX family ultra-thin laptops will undersell Apple's Macbook Air, which went on sale in June starting at US$999, by 10-20% when they hit markets in September this year.

Confident of ultra-thin computers, Compal's Chen predicts such PCs will drive the next wave of laptop replacements to reinvigorate the sector in 2013 by pushing market growth to 20%, basing such optimism on planned shipments of a slew of ultra-thin laptops by the end of this year. Also, Intel's latest technology has halved power consumption of its microprocessors, boding well for the development of ultra-thin laptops.

Chen concedes the staggering 20-30% growth of the laptop market in the past years will not recur soon, with moderate growth being the trend and market growth to be annually 5-10% this and next year.

Compal launched several ultra-thin laptop prototypes at the Computex Taipei 2011, with volume production to begin sometime next year.

Although tablets have been growing significantly, Chen feels they will not dampen laptop growth. While moving into ultra-thin computers, the company is also trying to create major revenue growth in tablet PCs.

To make room for tablet sales, the company has cut laptop sales to 85% of revenue in the second quarter from 90% and will further reduce the percentage to 80% at the end of this year. Compal plans to ship 48 million laptops and 3.8 million tablets this year, with laptop shipments to increase 5-10% in the second quarter and 15% in the third quarter.

Intel's plans more aggressive moves towards ARM. Mooly Eden says: “ARM will try to go up into the netbook space and go down to the mobile space. Let the best man win. Intel will step up efforts to develop its own microprocessors for low-power devices such as tablets.”

Intel's collaboration with Microsoft remains firm although both are developing partnerships with other spec setters. Michael Angiulo, Microsoft's Corporate Vice President of Windows planning for Hardware & PC Ecosystem, joined Maloney on stage at the Computex to discuss the latest developments of Windows 7 OS, saying: “Intel and Microsoft are working together as we speak on the next generation solution to push the envelop as our customers expect more.”

Intel and Microsoft have been working together for over 20 years to deliver innovations across many technology areas, and are working together on ultra-thin computer platforms built on Windows 7 and Intel Core 7 processors.

Microsoft also unveiled Windows 8, which supports both X86 and ARM architectures, in Taiwan only a few hours after the June 1 debut of the latest Windows OS in the United States.

Google is Aggressive
Search engine Google is as aggressive as Microsoft in drumming up support from Taiwan's IT manufacturers in the spec competition, promising to open a laboratory in Taiwan to develop Chrome OS preloaded laptops named Chromebooks in cooperation with local OEM/ODM PC makers, according to the senior vice president for Chrome business operation, Sundar Pichai, who attributes the decision to open the lab to the island's abundant OEM/ODM PC-making experience, also noting having approached CEOs at Asustek Computer Inc., Quanta Computer Inc., and Compal Electronics Inc. about the potentials of the Chromebook project.

Pichai touts that Chromebooks' performance will improve with the OS constantly updated online at each power-on, contrasting it to other OS that usually slow down exponentially as new apps are added. Chrome OS, Pichai notes, boots up a computer in eight seconds and instantly wakes up a computer from hibernation.

So far, Google has entered into alliance with Acer and Samsung on the Chromebook project, with Pichai believing more Taiwanese manufacturers will join after the laboratory is opened. Google's Chromebook has been stirring up questions surrounding the company's choice of laptop over tablet PC as its initial platform when people consider Google Android to be the dominant OS on non-Apple tablet PCs and smartphones, on which Pichai declined to comment during the laboratory plan announcement in early June in Taipei.

International IT heavyweights are justified to seek partnerships with Taiwan's manufacturers in specification competitions as Taiwan leads the world in IT hardware supply, as well as laptops, tablets and mobile phones, and as pure manufacturer of touch screens. Topology Research predicts Taiwan to retain 48% of global touch screen market this year.