BenQ demonstrated its BW1000 prototype blue-laser DVD burner at the recently concluded Computex 2005 and the company plans to start volume producing the product in the first or second quarter of 2006, depending on how quickly the market for blue-laser products develops. The BW1000 features writing speeds of 2x for Blu-ray single-layer and DL (single-sided double-layer) discs, 12x for DVD+R/-R, 4x for DVD+R/-R DL, 4x for DVD+RW/-RW, 32x for CD-R and 24x for CD-RW, as well as reading speeds of 2x for Blu-ray, 12x for DVD and 32x for CD, according to BenQ. Single-layer Blu-ray discs will have a storage capacity of about 25GB while DL versions will have a capacity of 50GB, so the BW1000 will target high-density applications such as HDTV (high-definition TV) recording and playback, the company stated. BenQ also showcased two DVD burner models (DQ60 and DW1640) at the show, with the DQ60 being BenQ’s first three-format (+R, -R and -RAM) drive. The DVD drive also features drag-and-drop data recording, so burning software is not necessary, BenQ pointed out. The model will be launched at the end of this month. Although BenQ began volume producing the DW1640 last month, the company added -R DL writing functionality to the model presented at Computex, BenQ indicated. In related news, Toshiba displayed a prototype HD-DVD (high-definition DVD) player model at the Computex show. BenQ DVD burners Specification DQ60 DW1640 Writing speed DVD+R DL 8x 8x DVD-R DL 4x 4x DVD+R 16x 16x DVD-R 16x 16x DVD+RW 8x 8x DVD-RW 6x 6x DVD-RAM 5x - CD-R 48x 48x CD-RW 24x 32x Reading speed DVD 16x 16x   CD 48x 48x Manufacturer’s recommended retail price (US$) 99 99 Source: BenQ, compiled by DigiTimes.com, June 2005 BenQ BW1000 Blu-ray DVD burner Photo: Evan Chao, DigiTimes

However high-tech a reporter tries to make reports from Computex, there’s a side to the show that is oriented to what can only be described as the gadget freak. Journos legging it around the four halls are likely to be side-tracked, if they have any pocket-protector imagination at all, by ultra-violet lit fans, patented CPU coolers, digital binoculars, infra-red holographic keyboards for PDAs, security flash-drive dongles, inkjet ink refillers and USB massagers. In this reporter’s opinion, the DocExpress document camera from New Image, on display on the third floor of the Taipei International Convention Center (TICC), was a clear winner in the gadget category. The idea, with DocExpress, is to make slow, cumbersome document scanning a thing of the past. DocExpress replaces elephantine scanning with a quick one-second flick of a switch, and an overhead camera captures the document at up to 3.0 megapixels, in up to 16 million colors. An A4 document will be captured at around 180dpi. This swing-arm camera unit is designed in Taiwan’s umbrella tradition, to fold up into something neatly compact that could be easily carried around by the corporate road warrior. Unfolded, it looks rather like a miniature construction crane, at a maximum height of 445mm. There’s no additional power-supply unit to lug around – the unit is powered from the USB port. When the overhead arm is horizontal, the application will be document scanning. But flip up the arm, and snapshots and video of a range of objects and events become possible. While most users will be capturing still images and documents up to A4 size, there are eight possible combinations of resolution and recorded video (the specs for the latter are given, by New Image, in frames per second). At the low end is 2048×1536 at 7fps. At the high end are 1025×510 at 30fps and 1224×190 at 78fps. Output can be via fax and email, as well as to a host PC under USB 2.0, at a maximum 480Mbps. Output can also be to a projector, making the DocExpress a potential presentation tool. Output can also be to a printer, to allow DocExpress the functionality of a photocopier. Software support is provided, including a TWAIN driver. There’s a lot about the DocExpress to light the imagination of any gadget freak. The time it would take to scan a 360-page book is unimaginable, given the torturous nature of the task, and the difficulty of cramming a book under a scanner lid. A dexterous user of DocExpress could do the job, theoretically, in around six to 10 minutes. We suspect that business cards could also be efficiently recorded using the DocExpress. Banks and offices that regularly have to process completed forms, passport pages, ID cards and the like, might also find this a useful gadget. Volume pricing was quoted at the show as between US$119 and US$159. A sample costs US$189. Look, no power supply! The DocExpress camera unit is powered from a USB port. Photo: company. New Image claims DocExpress can capture a document in one second. Photo: company. The DocExpress folds up into a compact, portable unit. Photo: company.

Mio Technology, an own-brand division of Mitac International, expects to debut a PDA phone with a built-in GPS module in the second half of this year, according to Michael Hsu, Marketing Director of Brand Marketing Division at Mitac. GPS capabilities will be one of the key features for Mio’s smart handheld devices, said Hsu, noting that built-in MP3 player functionality will be the other key feature. Europe is currently Mio’s largest market, and it accounts for 65% of the company’s sales, Hsu stated. South Korea is the company’s next biggest market, and Mio has been expanding its presence in Japan and North America starting earlier this year, Hsu said. The Mio-brand business currently accounts for 35% of Mitac’s handheld device business, said Hsu, adding that Mitac’s other business is all ODM/OEM. All production for the handheld devices is done at Mitac’s Kunshan Plant, Jiangsu Province (China), according to Hsu. In related Computex news, Mio was also showcasing the Mio 268, its first mobile navigation system with a hidden antenna. Rivals Acer, Asustek Computer and Leadtek Research also presented similar devices. Computex: Mobile navigation systems with hidden antennas Company Acer Asustek Computer Leadtek Mitac International Model image Model name n35 MyPAL A636 9700 MIO 268 Chipset provider - NA SiRF SiRF CPU provider Samsung Samsung Intel OS Microsoft Windows Mobile 2003 software for Pocket PC Premium Edition Windows Mobile 5.0 Microsoft Windows CE .Net 4.2 Microsoft Windows CE .Net 4.2 Memory 64MB SDRAM, 32MB cache NA 32MB NAND, 64MB SDRAM 32MB Flash, 64MB SDRAM Display 3.5-inch 65,536-color TFT (240x320) 3.6-inch 65,536-color TFT with touch panel 3.5-inch 65,536-color Dimension 12x7.2x2cm - 13.78X7.198-7.818X2.57cm Weight 165g - 210g Expansion slot SD/MMC, SDIO SD SD/MMC Wireless transmission IrDA USB 1.1 USB Source: companies, compiled by DigiTimes, June 2005.

Iwill is exhibiting a dual-Opteron small-form-factor (SFF) PC that supports two graphics cards using Nvidia's nForce4 SLI (scalable link interface) technology at Computex 2005, with the company claiming the product will begin shipping in September of this year. The dual Socket 940 system, named ZMAXd2, supports dual-core AMP Opteron processors and features the Nvidia nForce Professional 2200 MCP (media and communications processor). The ZMAXd2 motherboard has two DIMMs, two PCI Express (PCIe) graphics card slots and the system is powered by a 400-watt power supply. Iwill stated the SFF system will target workstation applications such as digital content creation, MCAD and electronic design automation. The company claims the system will begin shipping in September. Iwill ZMAXd2 Photo: Michael McManus, DigiTimes.com Iwill ZMAXd2 Photo: Michael McManus, DigiTimes.com

Shuttle aims to launch its XN26P XPC, which supports Nvidia’s SLI (Scalable Link Interface) dual-graphics card technology, by the end of July, according to sources at the company. The Nvidia nForce4 SLI-based solution will support single and dual-core AMD K8 Socket 939 CPUs, up to 2GB of memory, SATA2 hard disk drives (HDDs) and two PCI Express (PCIe) graphics cards using Nvidia’s SLI technology. The system will also feature Via Envy 24-bit audio onboard Shuttle also plans to market the system equipped with two Leadtek Nvidia GeForce 6800 GT PCI Express (PCIe) graphics cards with 256MB GDDR3 DRAM.

Gigabyte Technology and AOpen are exhibiting pico-BTX systems at the ongoing Computex 2005 show, with Gigabyte marketing its system for its ease of assembly, while AOpen expects the performance of its dual-core pico-BTX systems will boost its sales. BTX systems from both companies, however, do share a common feature in their cold metallic designs. Gigabyte has named its pico-BTX solution the CB series, and the Intel 915G-based system supports a 800MHz FSB, up to 2GB of memory, one PCI Express (PCIe) graphics card, one ATA hard drive and two SATA disks. The system is powered by a 270-watt power supply. The CB series also has one PCI slot, two rear USB ports, Gigabit LAN and front-side access for USB, IEEE 1394 and a 13-in-1-card reader. However, the key feature of the CB series is that no tools are needed for assembly. The system folds open, and then by using a series of sliding clips and latches, users will be able to install and secure two optical drives (ODDs), an IDE hard drive and all other components. According to the sales representative at the Gigabyte booth, the pico-BTX solution will have no trouble handling high-end graphics cards and will run at about 30-35dB. Although the design may seem drab, the system is definitely sturdy. The CB series will begin shipping in volume by the end of this month and Gigabyte is targeting the DIY market with the product, sources at the company stated. AOpen has also designed its BTX system chassis using a mix of black and metallic-colored grating, with AOpen’s pico BTX solution being based on the Intel 945G chipset and supporting dual-core Pentium D processors. The company has also designed a pico-BTX EPC (entertainment PC) based on the same board. Both of AOpen’s pico-BTX solutions will begin shipping in July, sources at the company stated. Gigabyte CB series Photo: Michael McManus Folding open Photo: Michael McManus CB innards Photo: Michael McManus Sliding latch here to remove drive Photo: Michael McManus Connecting clips for securing drives Photo: Michael McManus Gigabyte BTX family Photo: Michael McManus AOpen pico-BTX Photo: Michael McManus AOpen BTX family Photo: Michael McManus

Although Apple was able to temporarily banish Luxpro’s Super Shuffle MP3 player at CeBIT this year, Taiwan-based Luxpro is openly displaying its latest MP3 player, the MX-585D at Computex 2005. The model bears more than a passing resemblance to Apple's iPod shuffle. With a 64×48-resolution OLED display, the latest model also supports Digital Rights Management (DRM). It is compatible with three audio formats, including MP3, WMA and WAV. The model charges to 80% of capacity in just two hours and offers continuous use for 10 hours on a full charge, according to the company. In addition, the model supports 10 different languages. Luxpro’s MX-585D MP3 player. Photo: Eric Fan, DigiTimes.

A long-term fixture in Taiwan’s motherboard industry, Shuttle phased out its motherboard business at the end of 2004, and now focuses its business around its XPC small-form-factor (SFF) PCs. DigiTimes.com recently spoke with product marketing vice president Jonathan Yi about competing in the motherboard market as a second-tier player and the challenges Shuttle now faces in growing its XPC business. Q: Although executives from Shuttle have mentioned that the company quit the motherboard business, the company has never made any official statements. Can you tell us why Shuttle left the motherboard business? A: Shuttle had been in the motherboard industry for over 20 years. However, over the past three to four years, this business was not providing us with any profits. As a second-tier vendor, we were at a disadvantage, considering that first-tier vendors usually have 40-50 motherboard models on the market and another 20-30 models under development, while second-tier motherboard vendors have to try to compete with only 10-15 models. Actually, if you look at the Taiwan Stock Exchange (TSE), you will see that most second-tier motherboard companies have not been making any profits over the past few years. So, rather than splitting our resources by continuing to invest in a losing proposition, we decided it would be a much better return on investment if we focused all of our R&D on XPC development. Q: Do you think other second-tier motherboard companies will have to face similar decisions in the future, meaning do you see consolidation in the market? A: If you look at Taiwan’s motherboard industry, about 100 million boards are shipped each year, and the first-tier vendors – Asustek, ECS, Gigabyte and MSI – account for about 80% of the market. So, that leaves very little room for the 10-15 second- and third-tier companies that still produce motherboards. In addition, the clone PC market is shrinking, as more and more consumers are buying PCs from the top 10 brands, and this trend is affecting the overall growth of the motherboard industry (according to MIC, Taiwan’s motherboard shipments only increased 3.6% on-year in 2004 and the volume is expected to increase only 2.3% in 2005). In response to this trend, companies such as Asustek and Foxconn are cutting their costs and aggressively looking to expand their market share, which is making things even harder for second-tier makers. In my personal opinion, three or four motherboard companies will account for most of the market in the future. There will be a place for some second-tier makers, but they will have to adjust to the structure of the market in order to survive. For a company like Shuttle, we cannot survive on 150,000 motherboards per month. Maybe that is a business for a company with less than 100 employees. The future will be that of a second-tier comprised of much smaller companies that specialize in niche or emerging markets. The companies need to find a niche where the larger players are not paying attention. For us, we originally found our niche market with our XPCs in Japan. We have now grown our XPC business to the point where we can compete with first-tier motherboard vendors on brand-name and technology, so we do not need to rely on the motherboard business any more. Q: Are SFF PCs still a niche market? A: Well, in one sense SFF PCs are not a niche product, in the sense that all first-tier motherboard companies have marketed this type of product. However, companies like Hewlett-Packard (HP) and Dell have not really targeted the market, and the total shipment volume of is still only a small percentage of total PC shipments, so it is most definitely a niche market. Q: Is it an advantage for Shuttle that the SFF PC market is still niche, in that you don’t have to compete with larger players such as HP and Dell? A: Not really. If companies such as HP and Dell entered the market, they might bring Shuttle down, but we do not think that way. As I mentioned, we have built up our brand in the market and we have confidence in our products. Apple is just as famous as those other large brands, and the introduction of the Mac mini has not impacted our shipments one way or the other. However, those big brands do have a strong influence in the PC market and if they entered the SFF market, the overall shipment volume would most certainly grow, which is what we want. We want to expand the market, as that is the way to grow profits. Shipment growth is the nature of the PC business. The key to a company’s success, though, is the manner in which it increases its shipments. Q: If larger brands enter the SFF market, would you pursue OEM relationships with them, being that you have in the past had OEM relationships with some vendors marketing SFF PCs, or do you want to push your own brand? A: We are not really interested in pursuing any OEM business and it is not only because we want to market our own-brand. It is not that simple. Our experience is that the OEM mentality is different from the one we want. The goal in the OEM business is to aggressively cut your costs, which ultimately hurts your innovation and quality. We do not want to be constrained by this kind of cost-down mentality. We currently produce 12-15 models per year and we have a lot of other experimental models that never make it to market. That is where we are spending our R&D money, on technical innovation and product design. Q: Shuttle is quite well known in the gaming and enthusiast markets. Will you continue targeting this market, or will you also try to produce some more mainstream products? A: In general, the price difference between our XPCs and standard PCs in the mainstream market is a challenge for us to overcome. For example, Dell can sell an entry-level system for US$499 whereas we would sell a similar system for US$699, due to the smaller size, quieter noise level and special design of our product. Mainstream customers have not yet been willing to accept that bump in price. However, on the higher-end of the market, the difference is less pronounced and users are willing to pay a little extra for the added features. As a result, we have tended to focus on developing products for the enthusiast and professional segments. However, although this segment accounts for the bulk of our shipments, over the past six months our sales have been flat at 40,000-50,000 units per month. Before that, our shipments were growing. We believe that perhaps the barebones market has reached the saturation point. Over the past four years, we have shipped about 1.5 million XPCs, and I believe some 70% of these products are still on duty, meaning that we have not hit the start of the replacement cycle yet. Of course, some enthusiasts do change their systems quite often, but that is only a small proportion of the market. For more mainstream users, they may expect to use the product longer, maybe every four years. We have not figured out the exact replacement cycle yet. But since our products are priced higher than mainstream PCs, we believe that users will be able to get more mileage out of them, which means a longer replacement cycle. Q: How about the market for systems? A: In general, the systems market is for users who cannot assemble the systems for themselves. When it comes to things technical…forget about it. They just want to surf the Internet. They are also looking to pay mainstream prices for their products. For example, Dell can sell an entry-level system for US$499 whereas we would sell a similar system for US$699, due to the smaller size, quieter noise level and special design of our product. Mainstream customers have not yet been willing to accept that bump in price. However, on the higher-end of the market the difference is less pronounced and users are willing to pay a little extra for the added features. So, for the past year we have focused on introducing products for the enthusiast and professional segments, and most of our systems sales have been from those segments. However, as I said earlier, perhaps the shipment level has peaked. If we were able to design a mainstream product that maintained the quality, performance and sound level of our current XPCs, while also narrowing the price gap with competing mainstream PCs, then we would see a big spurt in our XPC sales. However, growing the mainstream market has the risk of alienating your customers on the high-end. There is still debate within our company on the importance of the lower end of the market. Some in our company think we should remain only in the high-end, while others believe we should introduce more mainstream products. There is no conclusion yet, meaning that any developments here are still in the discussion phase. However, if we want to stay in the market over the long-term, we will have to seriously consider mainstream products. Q: Although your gross margins were above 10% in the first quarter of this year and the company made a profit, you had losses of NT$76 million in the fourth quarter of last year. Can you say anything about Shuttle’s financial status? A: Well as we discussed earlier, Shuttle exited the motherboard business at the end of last year, so there were a number of things that had to be written off. However, the big reason was the appreciation of the Taiwan dollar. In fact, the depreciation of the US dollar continued to affect our business into the first quarter of this year, which means our profits should have been even better for the last quarter. Another contributing factor to last year’s disappointing four quarter was the fact that our gross profits were lower. We did not have any strong product launches, which tend to give a boost to margins. However, the situation improved greatly in the first quarter of this year, with the launch of our nForce4-based XPC. Our second quarter results should be even better than the first, as the exchange rate is steadier and the new product effect is there. Q: Can you tell us what is the outlook for the rest of the year? A: Well, since we did not have any profits in the fourth quarter of last year, we are quite aware of the need to remain profitable. That is the short-term goal for the rest of the year. We will not be trying to expand our market share using pricing strategies this year. However, we will still introduce a total of 10-12 new products for this year. We may also look to expand our business in developing markets, such as in the BRIC (Brazil, Russia, India and China) markets. In these markets we can have a great deal of improvement. Q: Will you add more new products at Computex? At Computex, we are introducing our dual-core solution based on Intel’s 945 chipset, as well as being the first SFF PC company to introduce a SLI (Scalable Link Interface)-supporting SFF PC. In addition, we are developing our concept of the digital home, and we will be showing our streamlined Pentium M-based M1000, which we introduced at CeBIT earlier this year. This product will be released sometime this summer at the same time as our widescreen 20-inch LCD is launched. Q: Are you optimistic about the market for the digital home? A: The digital home is still a long way off. In terms of hardware, software and the user interface, we think it still has a long way to go. However, compared to the PC market, it has much more of an upside. At this point, companies need to get involved by introducing products. Unless you get involved in the early stage, you will end up being a follower, which may mean sacrificing your quality or profits. Shuttle product marketing vice president Jonathan Yi Source: Company

Although small-form-factor (SFF) PC vendors do not in general offer customers the option of purchasing motherboard for upgrading their systems, Shuttle is displaying a number of XPC accessories at Computex 2005 to enhance and expand its current XPCs on the market, including a slim 300-watt power for its G-chassis, according to Ken Huang, chief architect of the XPC platform. The slim 300-watt power supply is designed for the company’s G-chassis, which currently supports 200- and 250-watt power supplies and is used in a number of the company’s mainstream and business XPC models, according to a Geoffrey Egger, a Shuttle marketing representative watching over the Computex show. In addition to targeting users that wish to max out their systems, Shuttle is looking to offer its distributors in the channel more flexibility with their SKUs, Egger explained. In that regard, Shuttle is also showcasing other XPC accessories including extended storage enclosures for supporting external 3.5-inch or 5.25-inch IDE drives, its CR40 16X DVD drive, a clip-on wireless LAN module for its P- and I-chassis and expansion kits for adding parallel and USB ports to XPCs. Shuttle slim 300-watt power supply Photo: Michael McManus, DigiTimes Shuttle XPC external storage enclosures Photo: Michael McManus, DigiTimes

Motherboard maker and Pentium M desktop specialist AOpen introduced a Pentium M-based mini PC, codenamed Pandora, at Computex 2005, with the Wintel-based small-form-factor (SFF) PC matching the Apple Mac mini in size, performance and price, according to sources at the company. The AOpen mini PC system, which measures 15cm by 15cm and is only 5 cm high, is powered by the Intel Pentium M processor running at 1.3GHz or 1.6GHz and is supported by the mobile 915GM chipset with integrated GMA 900 graphics. With a target price of US$499-699 for entry-level models, the system will be the most competitive Pentium M desktop solution on the market, the sources pointed out. The sources added that the current challenge of hitting the US$499 target price is more of a software issue than a hardware issue. The system will include a 2.5-inch hard drive and slide-in optical drive, which will vary among a combo drive, DVD-ROM and DVD burner, depending on the SKU, the sources explained. A wireless mini-PCI 802.11 a/b/g wireless communication module will also be included, as well as Bluetooth support on higher-end models. The system will also have two USB ports and one IEEE 1394 port, thought the sources stated that the company has not yet finalized the specifications. AOpen will target the digital home with the system, and has included DVI, S-Video, and YPbPr outputs for connecting to HDTVs, plasma displays, large screen displays, and high definition audio products, stated Tony Yang, marketing director of AOpen. The system is also designed for low-noise environments, and so has only two fans and is powered by an external 85-watt power supply. AOpen claims the product was developed in cooperation with Intel, and will hit the market by the end of the third quarter. In addition to marketing the system under its own brand, AOpen is also considering OEM opportunities. AOpen Mini PC Photo: Michael McManus