Shuttle continues to fill out its lineup of K8 PCI Express (PCIe) small-form-factor (SFF) PCs with today’s introduction of the XPC ST20G5, based on the ATI Technologies (ATI) Radeon Xpress 200 chipset. The product will complement Shuttle’s recently introduced K8 PCIe XPC SN25P, which is based on the Nvidia nForce4 chip. The new XPC ST20G5 is the first SFF PC to be based on ATI’s Xpress 200 chipset, whose integrated graphics are based on the Radeon X300 core. The integrated part includes support for DirectX9, vertex shader 2.0 and pixel shader 2.0, and will be partnered with ULi’s 1573 southbridge in the XPC ST20G5. A key feature of the ATI Xpress 200 chip is support for multiple displays, and Shuttle has included both DVI and VGA outputs with the system, so that two monitors can be used. The XPC ST20G5 also includes one PCIe x16 slot, and if a PCIe graphics card is added, a third display can also be used. According to a representative from Shuttle, the XPC ST20G5 will be targeted to the mainstream, and will be priced lower than the nForce4-based XPC SN25P, which is targeted toward gamers. Although the SN25P just began shipping, another Shuttle representative stated that the system is selling very well, especially in Japan. The XPC ST20G5 is expected to begin shipping in April and will be available as a system or barebones unit from Shuttle’s offices in the US, Europe and Taiwan. Shuttle XPC ST20G5 can support up to three monitors Photo: Company Shuttle XPC ST20G5, G Chassis Photo: Company

The first Nvidia nForce4-based PCI Express (PCIe) small-form-factor (SFF) PC hit the market today, when Shuttle launched its XPC SN25P. Shuttle also announced the launch of a home-theater XPC, the SB83G5C, which is particularly targeted for Asian markets. The XPC SN25P features a Socket 939 motherboard supporting AMD Athlon 64 CPUs, a 1GHz HyperTransport system bus, one PCIe x16 slot and one PCIe x1 slot, as well as support and physical space for three hard drives (one IDE and two SATA drives). Built using an Nvidia nForce MCP (media and communication processor), the system also supports an integrated hardware firewall, SATA I and integrated RAID. In addition, the SN25P is housed in Shuttle’s P chassis, which features a 350W power supply yet still only produces noise at about 31dB when the system is at rest, the company stated. Shuttle is also bundling Trend Micro PC-cillin software with the SN25P. The XPC SN25P will begin shipping in volume next week. The system will be available immediately in Taiwan and about one week later in other markets. The company plans to first ship the SN25P as a barebone unit, with sales of complete systems following later. Also today, Shuttle launched its XPC SB83G5C home-theater XPC. The Intel 915G based system features an integrated TV tuner and can be powered by remote control. Software is also included with the system for recording television programs, as well as organizing and playing audio, video and image files. The system will be targeted for Asian markets in particular and will begin to be available in the middle of March. According to the company, Shuttle shipped 48,000-49,000 XPCs in January, with PCIe systems accounting for about 30% of the shipments, up from 20% last year. Shuttle is also the only SFF PC company to launch a BTX SFF PC, and BTX sales accounted for about 5% of the company’s January shipments, with Japan being the market most receptive to the product. Shuttle’s XPC SN25P Photo: Company Shuttle XPC SN25P, front view Photo: Company XPC SB83G5C home-theater system, from Shuttle Photo: Company

On the heels of launching the EY855-II XC Cube, its first Intel Pentium M-based small-form-factor (SFF) PC, AOpen is now preparing for the March launch of its smallest XC Cube SFF PC to date, the MZ 855, according to sources at the company. The Intel 855GME-based system, which the company has dubbed the Cube Mini, will only be 106mm tall and will support Socket 479 Pentium M processors, a 400MHz FSB and up to 2GB of DDR333 memory. Although running a notebook CPU, the MZ 855 will still support desktop hard drives, and features two front-panel USB ports. By using a notebook processor in the SFF PC, AOpen has been able to design a highly compact system – even for SFF standards – that also runs quietly, at only 27dB when fully loaded, the sources explained. However, with a 150W power supply and support for graphics cards only up to 185mm in length, the MZ 855 is not targeted for all enthusiasts, but rather to those who value space-saving above all else, the sources pointed out. Although AOpen plans a global release for the MZ855, the first target market will be Japan, the sources added. The release of the MZ 855 SFF PC demonstrates AOpen’s dedication to pushing notebook CPU solutions on the desktop. The company claims that last November it was the first company to release a desktop motherboard based on the Socket 479 Intel Pentium M CPU, and this month stated it was the first company to release an SFF PC based on the i855GME. By the middle of the second quarter, the company will also release a version of the Cube Mini based on the Intel 915GM chipset, the sources stated. One reason vendors may begin offering more notebook CPU-based desktop solutions this year is the increased availability of notebook CPUs in the channel, the sources noted. Intel has increased its support for the clone notebook market and is looking drive up the share of clone notebooks in the global notebook market to 30-35% in the next two years, other sources explained. The chip giant has also introduced its Common Building Block (CBB) program to help simplify the integration and distribution of notebook computers, which should mean more notebook CPUs available in the channel. AOpen Cube Mini Photo: Company

Better than expected sales of its two recently released Nvidia nForce4 AMD64 motherboards helped push DFI’s January revenues up 28% sequentially to NT$242 million, according to the company. DFI released the two high-end motherboards – the LANParty NF4 SLI-DR and LANPartyUT NF4 Ultra-D – earlier this year and expected to ship 7,000 units in January, boosting its revenues 10% on month. However, stronger than expected demand helped the company ship about 10,000 units last month, and DFI expects shipments of the two motherboards to total 17,000 units in February. About 25% of the shipments were for the SLI-based NF4 SLI-DR motherboard, sources at the company pointed out. The sources explained that the company was able to enjoy such success by beating its competitors to market with an SLI-based motherboard, while the boards also received positive reviews from enthusiast websites. Only Asustek Computer was able to release an SLI board in volume before DFI, the sources stated. However, the sources added that Micro-Star International (MSI) and Gigabyte Technology have since also released SLI motherboards. DFI will also be releasing a mainstream Nvidia nForce4 motherboard by CeBIT, but will wait until the second quarter before releasing an nForce4-4X socket-754 motherboard, the sources indicated. DFI already provides socket-754 motherboards featuring the more cost effective VIA K8T800P and ULi M1689 core-logic chipsets. In related news, DFI has recently begun collaborating with overclocking memory module specialist G.Skill to bundle their products together in selected markets.

Add Biostar Microtech International to the list of companies preparing to release Nvidia nForce4-based small-form-factor (SFF) PCs this quarter as the company plans to begin shipping its iDEQ 330P SFF PC, in volume, in mid-March, according to sources at the company. The iDEQ 330P is expected to compete with Shuttle's SN25P XPC, which should be the first nForce4-based SFF solution on the market, with its official launch date set for February 22. The AMD CPU-based iDEQ 330P will feature a Socket 939 motherboard with slots for one PCIe x16 graphics card and one PCI card. A mini-PCI-card slot has also been included, to accommodate wireless cards. The system will also support standard nForce4 features such as a hardware firewall, support for 3Gb/s SATA hard drives, native Gigabit Ethernet networking and overclocking options. Because the iDEQ 330P will target gamers, it will also include a 300-watt PFC power supply, compared to the 250-watt power supply Biostar uses in its other 300 series PCI Express (PCIe) SFF offering, the Intel 915G-based 300G MCE-1. However, the nForce4-based iDEQ 330P will not include an FM Tuner or run Microsoft Windows Media Center Edition (MCE), unlike the 915G-based solution. The sources explained that Biostar currently plans to target mainstream users with its Pentium 4 PCIe solutions and gamers with its AMD 64-bit PCIe solutions. Nvidia recently announced that it has shipped more than one million nForce4 media and communication processors (MCPs) since the availability of this part in December 2004. This strong demand has resulted in the fastest sales ramp the platform group at NVIDIA has ever experienced. This high level of demand has also helped Nvidia grow its share of the AMD64 market to 48% in the fourth quarter of 2004, as reported by Mercury Research.

After some fits and starts, Elitegroup Computer Systems (ECS) is back on track and shipping its EZ-Buddie 2 small-form-factor (SFF) PC in volume, according to sources at the company. ECS began shipping the EZ-Buddie 2 in September 2004, and shipped about 5,000 units the first month. However, beginning in October, the company faced a shortage of the modules used in the unit’s front-panel system status display. According to the sources, ECS was forced to discontinue shipments of the SFF PC for two months, and by the time shipments resumed in December, the company had missed the key Christmas season and lost some customers to its competitors. However, despite shipping only 2,000 units in December, the company is now ready to ship the systems in volume, and ECS is confident it will be able to quickly increase its monthly shipments to about 10,000 units, the sources added. The EZ-Buddie 2 is a variation on the SFF PC theme. ECS took a cube-shaped SFF PC and attached two large speakers to the sides, giving the product the appearance of a portable stereo system. The system, which ECS calls a personal entertainment computer (PEC), also includes an alarm clock, remote control and instant-on Linux-based DVD player and FM radio, all of which add to the consumer electronics (CE) feel of the product. ECS has also made it easy for non-enthusiasts to maximize the performance of the system by including a rotary dial on the front panel for overclocking the CPU. Since the product targets mainstream consumers and students, ECS does not focus its sales in the barebones channel, as other SFF PC vendors do. Instead, the company tends to work with local systems integrators (SIs), and is currently cooperating with small SIs in Japan, US and Europe, the sources explained. In addition, ECS may look to partner with more chain stores to grow its SFF PC business, much as it has done with its notebook business, where it partners with Wal-Mart, Fry’s and Dixons, the sources added. The display module shortage highlights one of the difficulties SFF PC vendors face as they begin offering more complex system designs: the management of an expanded supply chain. Sources from another SFF PC vendor, while denying that it also faced a shortage of display modules in the fourth quarter of last year, did admit that its module supply is difficult to control, as the lead-time is about 4-6 weeks. Another SFF PC vendor, Micro-Star International (MSI), recently exhibited a simplified version of its Mega PC, which did not include its usual front-panel display module. Another challenge SFF PC vendors face is transitioning from one generation of product to the next. Through the first eight months of 2004, ECS had monthly shipments of 15,000-20,000 units of its EZ-Buddie 1 PC, but the company phased out production of the system in the fourth quarter and decided to focus on the EZ-Buddie 2 instead, the sources explained. For its non-SFF PC business, ECS had average monthly shipments of about 30,000 barebones units in 2004, the sources indicated. The company plans to increase those shipments to about 60,000 per month this year, the sources added. ECS EZ-Buddie 2 Feature Specification Dimensions (HxWxD) 220 x 180 x 320mm Form factor SFF (proprietary) Processor support Intel Pentium 4 Core logic Intel 865G Video Integrated Instant-on features DVD, VCD, audio CD, FM radio LCD display module Hardware diagnostics and alarm System/CPU temperature Multimedia (EZ Cinema) indicators FM Radio/Clock Remote control Yes Speakers 10W (5W + 5W, RMS) 20Hz~20KHz Source: company, compiled by DigiTimes, February 2005. ECS EZ-Buddie 2 SFF PC Photo: Company

Whereas most small-form-factor vendors have attracted media attention by targeting gamers and enthusiasts with their cube-type systems, Asustek Computer has adopted a much lower market profile (no pun intended) and is not really considered a major player in the segment. Nevertheless, on closer inspection, Asus can, in fact, be considered one of the leaders in the SFF industry. Asustek shipped 500,000 barebones units last year, of which about 90% were for SFF systems, placing the company only behind Shuttle for the number of SFF shipments by Taiwan vendors in 2004. Asus has blended into the SFF background mainly because it does not focus on enthusiasts as much as its competitors do. Its product specs are not leading-edge, and most of its chassis designs are traditional. Enthusiasts, the company argues, like to build their own systems and maximize their expansion options, so they are much more likely to choose the ATX form factor, which is a segment the company already targets with its motherboards. Instead, the bulk of Asus’ SFF PC sales come from the mainstream consumer and business segments, where the company has found success by offering an assortment of products. The company appears optimistic about these markets, and it expects its shipments to double this year – and that could well end up making Asus Taiwan’s leading SFF vendor. Although Asustek, like other SFF vendors, believes that the trend in personal computing is towards smaller, quieter systems, the company does not think any one form factor or chassis style will prevail in the SFF market. Different feature sets are in demand from different segments – what the business segment likes may be quite different from what pleases consumers – the company argues, and the price premium customers are willing to pay varies also. Spicing up the SFF So instead of producing just one type of SFF chassis and motherboard style, the company targets a variety of market segments by offering five different proprietary SFF motherboard form factors, and over 10 SKD units. Most of the company’s SFF PCs resemble shrunken traditional PCs, but with slight variations. Asus has a mini-tower line that is only 30cm deep, as opposed to the 38.5cm depth of the company’s micro-ATX systems, while its slim-line SFF PCs are only 90cm wide and 275cm tall. About 80% of the company’s barebones shipments came from these two lines last year, with sales being evenly split between the business and consumer markets. The company also has a consumer-electronics (CE) line of SFF PCs, which includes its cube-shaped S-presso and its DigiMatrix products. However, the company does not expect sales of these products to rise dramatically until after Microsoft has introduced its next-generation operating system, Longhorn.. The company is able to carry many different product lines because it has the financial security and manufacturing capabilities to do so, as well as the ability to leverage its current motherboard channel to develop its sales, according to sources in the market. This year, the company still expects its mainstream and consumer-SFF systems to account for about two-thirds of its barebones sales, but the company still plans to beef up its SFF products. Asus will add some AMD CPU-based products to what is currently an all-Intel lineup, and at CeBIT 2005 there will be some PCIe SFF PCs at the company’s booth.

VIA Technologies and Tranquil PC have announced the availability of the compact Tranquil PC Media Center 2005, model T2e.MCE2005s, powered by the latest VIA EPIA SP13000 motherboard and Microsoft Windows XP Media Center Edition 2005. The T2e.MCE2005s features a noiseless processor and northbridge cooling system – a twin-piped passive cooling system that eliminates the need for cooling fans on the processor, power supply and case, and leaves the spindles of the storage and optical drives as the only moving parts in the whole system, according to the companies. Optimized for the living room and other noise-sensitive areas, the system addresses the issue of unwanted PC noise, provides “personal electronics” design value, and features all the benefits of running Microsoft Windows Media Center Edition, commented Richard Brown, associate vice president of marketing for VIA. The system is built around the VIA EPIA SP13000 Mini-ITX motherboard, which features low power consumption and numerous levels of integration, as well as offering dual digital tuners, 6-channel surround audio, integrated graphics and a 1.3GHz VIA C3 processor, according to David Thompson, president of Tranquil PC. The Tranquil PC measures 330×255×63mm and is available in black or silver with a polished clear front panel with blue back-lit tones.

Although the PC industry has always seen variations of small-form-factor (SFF) PCs, it was only when Shuttle Computer introduced its first XPC about four years ago that the segment really took on a life of its own. Shuttle is now widely recognized as the pioneer of the SFF movement, and Ken Huang, Shuttle vice president of systems development, is considered the chief architect of the SFF concept at Shuttle. DigiTimes recently met with Mr. Huang to talk about the history of the XPC and how the product changed the company, as well as the challenges Shuttle now faces in the SFF market. Q: Shuttle is considered the industry pioneer of small-form-factor PCs. Could you briefly review the circumstances that led you to develop this market? A: Shuttle has been in the motherboard industry since 1983. However, as PC growth began slowing several years ago, the industry began falling into decline. With standards set by Intel, IBM or even Microsoft, motherboards had become a commodity product, which left little room for motherboard companies to earn a profit. At Shuttle though, we noticed that IC design was progressing at a fast pace, and this development opened up new opportunities in motherboard design. So, we decided to design a motherboard that was much more compact than the industry standard, which was ATX at the time. You see, ATX boards are quite large and support a number of expansion slots, but IC design had improved to the point where more and more functions were being integrated onto the chips. This meant that more features could be incorporated within a smaller motherboard footprint, and less expansion slots were needed. Our partner on our first project was VIA, and we designed a 17×17cm board for them. What is now the Mini ITX platform is actually based on that original 17×17cm board design. When we first started selling this motherboard, our sales were not that strong. An interesting reaction to our design was that customers took a look at the much smaller motherboard and immediately assumed that it was less powerful and had fewer features than a standard motherboard. Another problem we faced at the outset was that we were still using an ATX chassis with the motherboards, which left a lot of empty space inside the chassis. This also led customers to believe that the design was lacking features. So, we realized that we had to develop our own chassis for the motherboard, and we developed the cube-type chassis, and the product became the XPC. The first XPC we sold was the SV24, and we targeted the Japan market. Customers loved this product, and our sales did very well. Q: Aside from size, what were some of the key differences between your XPC small-form-factor computers and more traditional computers? A: The thing about our new form factor was that it created a truly “desktop” PC, and moving a desktop PC to the tabletop was actually a revolutionary process. It introduced a number of challenges that PC vendors had not really dealt with before. Traditionally, a desktop PC sits under the table, far away from the user and out of the field of vision. However, with the XPC, users were only about 50cm away from the product and always within line of sight, making acoustics, aesthetic design, and accessibility much more important. The first version of our XPC did not take this close working relationship into account and produced a noise level similar to standard PCs – about 50dB – and this was unacceptable to our customers. Since then, we have made noise reduction a central issue in our XPC product development, and our current XPCs produce 30-40dB on average, which is very similar to the background noise level of an average living room. Also, when the PC was sitting under the desk, users did not worry about the appearance, the external design, of the product, but once we moved the PC to the “desktop,” users became much more aware of the style and look of the product, and in turn much more demanding. Shuttle was a leader in bringing style to the PC, and our XPCs were some of the first products to introduce an aluminum chassis and stylish bezels. In addition, moving the PC to the desktop made it much more accessible, so users wanted a much more user-friendly device. We were one of the first companies to include a front-panel interface in our computer designs. We included USB, earphones and firewire connectors on the front panel of our early products, and we have continued in that vein, providing even more multimedia connectivity on the front of our XPCs, including S/PDIF and 5.1 audio. We also pay special attention when planning the layout, so for example our card reader is placed near the top of the computer, where it is much more accessible. Q: How did the XPC change Shuttle? A: Shuttle was in the motherboard business for 20 years, but this could never be a successful business for us as it is based on price and volume, and less on know-how. So we exited the motherboard business completely, and we now focus on our XPC business. However, although XPCs are the focus of our business, we also sell the components that help complete the total XPC experience. For example, most of our systems are sold as barebones units, so we also offer our customers products such as keyboards, mice and DVD burners that match the style and craft of the XPC. In addition, since our product is a portable solution, we found that we had to design our own LCD monitors. Portable monitors need to be rugged, and although it is easy to purchase rugged monitors on the market, it is very difficult to find high-performance rugged monitors, especially ones that are portable and stylish. We are also looking to expand our business by doing special chassis designs for companies that want total-immersion branding. We are way out in front of this trend, and to tell you the truth, we are waiting for the market to catch up with us – and it will. Look around and you will see product placement everywhere; there is even a Hello Kitty computer. Last year, we did a special project as part of our sponsorship of the World Cyber Games (WCG) 2004 Grand Final held in San Francisco. Every competition and administration machine was an XPC with full WCG branding for the event. During and after the show we sold all of the 1,000 or so units we built for the event. It was very gratifying. Q: So how successful has the company been? After all, although it is possible to make PCs smaller and with a nicer appearance, this does add to the cost of the product. Do people really want this type of product – meaning, are people willing to pay more for a small-form-factor PC? A: Speaking strictly in revenue terms, our sales were flat in 2004, but you also have to realize that we were phasing out our motherboard business last year. In terms of the XPC business, though, in the past most of our sales have targeted the DIY market, which means professional users. In this segment, we have been able to develop a strong following, especially among what we call the buzzmakers, people who spread the word to their friends, families and colleagues, letting them know how great the product is. However, no matter how much the buzzmakers talk up the product, they can’t go around building systems for everyone, so the DIY market is limited to more professional users. That’s why, in order for us to be more successful in the long term, we have started to provide complete systems to develop our business in the consumer segment. Selling complete systems in the consumer segment is new for us, though, and since our product is so special, it requires us to devote a lot of resources to educating the market. In addition, we are spreading the awareness on our own, as few companies offer a solution like ours. However, the market is interested in products like this, and we are confident in the direction our company has taken. Look at Apple. They have just come out with the Mac mini. Why? Because that is the future of the PC, combining stylish design with a small form factor. Shuttle is already there. Compare the PC market to any other market. Think of cars; most people would find it strange if over the past 20 years, every car on the market looked the same, with vendors only upgrading the engines. But this is actually the case in the PC industry. “PC” stands for personal computer, and we have set about making it a more personal product, adding an aluminum casing and a more stylish design, instead of offering beige boxes like every other vendor. Most PC companies are unimaginative, and their actions demonstrate how they believe that PC stands for “price equals cost.” At Shuttle, on the other hand, we believe that hi-tech can have style, and that is what people want. Q: So Shuttle is evolving from a motherboard and barebones PC vendor to a provider of complete solutions. What are some of the challenges you face in this transition and what percentage of your shipments will be complete systems this year? A: In transitioning to a complete systems provider, we have had to further develop our logistics network, as finished products require more consideration for customs, taxes and local after-sales support. In addition, we have had to increase our ability to secure financing and more reliably forecast our sales, since as a system provider we need to outlay more money for CPUs, memory, and other components, whose volatile pricing requires good inventory control. We estimate that about 10% of our sales this year will be complete systems, but we are taking it slow. In North America, we sell direct, through e-commerce sites, but we also sell systems through the retail channel at CompUSA and BestBuy. The Europe market is being developed through our office in Germany, which acts as a clearinghouse for the rest of Europe. Q: Do you see recent developments with Apple’s Mac mini and Intel’s pico-BTX solution as a threat to your business or as a positive development? A: We think the Mac mini is very positive for Shuttle. Apple is a major IT company, so people will look at what they are doing and start paying more attention to the small-form-factor market, which will help it expand. For Apple, though, its growth will be limited by the fact that the Mac operating system is not really expected to win over more than 5% of the market. At any rate, Shuttle is the leader in the small-form-factor segment for style, performance and quality, so we are the ones who will benefit as the market expands. At Shuttle, we like it when our competitors advertise, because they draw more attention to the small-form-factor segment, even though they lack the quality, style and depth of product that Shuttle provides. Q: . . . and pico-BTX? A: Shuttle does not see pico-BTX as being a threat. In fact, we are the only company to have a pico-BTX solution already selling in the channel. However, at Shuttle, we consider our self-developed Integrated Cooling Engine (ICE) heatpipe technology a more advanced thermal solution. Our ICE technology has a thermal efficiency of 0.16 but the thermal efficiency of pico-BTX is 0.33. However, we also believe that companies will have difficulty figuring out the thermals for pico-BTX, especially for graphics cards. The pico-BTX standard calls for an even airflow over the motherboard, but some of the more powerful fans used on high-end graphics cards will disrupt this airflow. This is mostly due to the BTX-designed placement of the graphics card in the chassis, which makes the thermals difficult to control. Even our current solution, the XPC SB86i, is meant to be used as an integrated graphics solution. However, in the long term we think BTX will help our competitors more than us. They are not as devoted to the details of their products as we are, so they will be very willing to just follow an industry standard set by someone else. At Shuttle, we will have a full lineup, featuring our own designs, as well as pico-BTX solutions. Q: What is the future of your mini-PCs, and would you consider offering cost-down solutions to expand the market? A: Consumer products are one of the future products, and we are looking to target the general market with our complete systems. At the same time, however, we will continue to target power users. Shuttle is the market leader in terms of thermal design, and our biggest advantage is in the performance market. Even though we are seeing chip designers aiming for a plateau in the energy consumption of their products, you have to consider that their designs are coming in ever-smaller packages, which makes it more difficult to control the thermals. Nevertheless, Shuttle now advertises thermal support for 3.8GHz and beyond, and our P-chassis features a 350-watt power supply. In terms of cost-down. Shuttle focuses on solutions, not costs. So, the reason Shuttle products may be more expensive than the competition is because we offer more features. Of course, we are concerned about reducing our costs, but not at the expense of quality. For the SFF market to grow, it will not take lower costs but a more educated market. If you look at other products on the market, people are willing to pay more for products they like. The problem facing our market is that most people are not even aware that these products are available. Ken Huang, Shuttle vice president of systems development Photo: company Shuttle SB77G5 XPC Photo: company Shuttle XP17 LCD monitor with XPC Photo: company Total immersion marketing Photo: company

Taiwan-based vendors of small-form-factor (SFF) PCs are optimistic about the influence that Apple’s new Mac mini will have on the PC market, since it should draw more mainstream attention to the SFF PC segment, according to sources at the vendors. The recently introduced Mac mini is only two inches tall and 6.5 inches square, with retail prices starting at US$499. Apple is positioning the Mac mini as an affordable alternative to Windows-based PCs, and the company hopes that it will help win over more customers to the Mac operating system. However, Taiwan SFF vendors point out that Apple has only about a 2% share of the overall PC market, and interoperability issues will prevent many users from switching operating systems. So Apple’s market share cannot be expected to increase that much, the vendors explained. However, the SFF vendors do think that the Mac mini will have an influence on the PC market, as Apple will grab a fair portion of mind-share among mainstream users. Users will be attracted by the idea of an affordable PC that is small and stylish, and this in turn will make more mainstream users consider purchasing SFF PCs, the vendors argued. Although not as compact as the Mac mini, when compared to traditional PCs, SFF PCs are still smaller, relatively more stylish and run more quietly. Over the past few years, most SFF vendors anticipated that demand for their products would grow steadily, but although there has been good uptake among gamers and enthusiasts, SFF PCs have yet to make a dent in the mainstream market. In 2004, SFF PCs accounted for about only 1% of the total computer market, stated a source at one of the vendors. One obstacle SFF PC vendors face is that their products are generally more expensive than low-cost, traditional tower PCs offered by large brands, such as Hewlett-Packard (HP) and Dell. However, with Apple now entering the mainstream PC market, SFF vendors expect buyers to begin comparing affordable Windows-based systems, with similar products from Apple. One of the vendors noted how the success of the iPod has boosted sales for MP3 players used with Windows-based machines. If the Mac mini sells well, and Apple grabs more market share, it will drum up more demand for similar types of Window-based machines, the vendor stated. If the Mac mini sells extremely well, the vendor added, then things would get very interesting, as it would make Microsoft sit up and take more notice of the SFF segment.