Small-form-factor (SFF) desktop PCs are still a relatively new concept in the PC market. It was less than four years ago that Shuttle introduced its first SFF PC model, the PC-SV24. The company is now widely recognized as the pioneer of the SFF movement and the originator of the SFF concept. Last year, Shuttle reported that it had shipped its millionth unit from its XPC family of SFF PCs. Currently the company has a comprehensive SFF PC product lineup, consisting of models for both the Intel and the AMD CPU platforms, based on chipsets from five vendors (Intel, VIA Technologies, SiS, ATI, Nvidia) and targeting various market segments from value systems to solutions for enthusiasts and “overclockers.” Strictly speaking, there is no “classical” definition of an SFF PC. If the definition is a PC that is smaller than a regular desktop PC housed in a tower case, products that follow those criteria were available before the Shuttle PC-SV24. However, Shuttle was definitely the first company to come to market with a complete concept of a compact desktop PC and its own vision of the future of the product. The Shuttle PC-SV24 featured the VIA Apollo Pro 133A chipset with integrated graphics and supported Socket 370 CPUs, though the system came with only one PCI expansion slot on the motherboard. The company had chosen its own proprietary form factor for the product, instead of an open standard. This began a trend towards non-standard form factors, with offerings from other vendors in addition to Shuttle. These rival motherboard vendors had recognized the benefits and potential of SFF PCs, and they entered the market with their own solutions based on their own proprietary form factors. Currently, there are still a wide variety of form factors in the SFF PC market, from tiny boxes with a processor embedded on the motherboard to the larger-sized cases that offer more upgrade options. However, when the industry talks about SFF systems, the reference is normally to the more-or-less cubic designs, similar to the first model introduced by Shuttle in 2001. These products are still mostly sold as barebone systems, comprising case, power supply, motherboard (typically with integrated video, audio and LAN support), mouse and keyboard. Some vendors may also bundle their products with monitors, optical drives, or other components, though key components such as CPUs, DRAM memory modules and HDDs are usually sold separately. Since Intel introduced its BTX (Balanced Technology Extended) specification at IDF Fall 2003, many vendors have also focused their efforts on bringing this form factor to the SFF PC segment. Until now, however, these developments have not actually resulted in many new products. It is interesting to note, though, how these efforts have also given new life to attempts to use other standard form factors to design SFF PCs, such as Micro ATX or Flex ATX. The SFF market was also one of the first PC segments to understand that PCs are now morphing into consumer-electronics products, as the vendors offered customers more stylish designs and more accessible products. This general trend to the convergence of IT and consumer electronics is ongoing, and makers now devote as many resources to designing the outside of their products as they do the inside. Over the next several months, DigiTimes.com will take a closer look at the products and vendors in the SFF segment, as well as the market in general, with the intention of providing a better picture of where the market stands and where it is heading.

Shuttle Computer shipped 638,000 small-form-factor (SFF) computers in 2004, up 16% from the 550,000 XPCs it shipped in 2003, according to company sources. The designer and manufacturer of small-form-factor (SFF) computers and accessories also continued to increase its focus on its XPC line in 2004, as it phased out its motherboard business of 20 years and formally announced a program to offer complete XPC systems worldwide. A December 2004 report had Shuttle estimating that 20% of its XPC shipments last year were for PCI Express (PCIe) systems, while 80% were AGP-based. The company also expects to increase its ratio of PCIe systems to 50% in 2005. Although Intel-based systems accounted for about 65% of the company's XPC shipments last year, and Shuttle’s AMD-based XPC shipments should soon receive a boost as the company is preparing to ship its SN25P XPC, which will be the first nForce4-based small-form-factor solution on the market. The SN25P is expected to begin shipping in volume in mid-February, with the official launch date set for February 22. Europe and the US will account for 70% of the first shipments. The SN25P will be the first small-form-factor PC to feature Hypertransport and PCIe. The AMD Socket-939 CPU-based solution will be housed in Shuttle’s P-chassis, which features a 350-watt power supply, the sources added.

AOpen took the top spot in Japan’s barebones-PC market in 2004, taking a 37% market share, according to statistics compiled by Japan's Business Computer News (BCN). BCN’s data had Shuttle ranked second with a 21% share, and Asustek rounding out the top three with 15% of the market. According to market sources, the barebones shipment figures are key indicators for tracking shipments of mini PCs in the Japan market, and AOpen confirmed that a large portion of its barebone shipments were for its XCcube line of mini PCs. AOpen’s top-selling barebones PC in Japan last year was its XCcube EZ65, which targets the consumer market, and the product continues to sell well in 2005, with BCN ranking it the top-selling barebones PC in Japan for the first week of 2005, accounting for 11% of the market. Although Japan’s mini-PC market is small, with a total sales volume of about 10,000 units per month, industry sources say it is a key market for mini-PC vendors as margins are higher and customers are more willing to adopt the most recent, more consumer-oriented designs. AOpen only began selling mini PCs in Japan in the fourth quarter of 2003 but was able to quickly grow its market since it had strong brand recognition in Japan, where it once ranked as the number-one motherboard vendor, stated Tony Yang, marketing director at AOpen. By the end of 2004, AOpen was shipping about 10,000 mini PCs worldwide per month, and the company aims to triple its shipment this year. In addition to barebones PCs, AOpen manufactures motherboards, optical disc drives, and other PC components, and ships 10,000-15,000 notebook PCs per month. Last year, its barebones-PC business was its most profitable business.

To promote the first production run of its PCIe-enabled pico-BTX XPC model SB86i, Shuttle Computer will bundle a free BTX CPU cooler with each barebones system, according to sources. Although the sources claimed the 5000 units will begin shipping next week, the company refuted the claim and stated that the systems will not begin shipping until mid-December, although they will be available in retail outlets before Christmas. The first shipments will mostly be to the US and European markets, the company added. According to a Shuttle press release, the SB86i XPC will be the first commercial application of the pico-BTX design specification. The barebones system is built around the Intel 915G chipset, which integrates Intel’s Graphics Media Accelerator 900 and features Microsoft DirectX9 support. The SB86i XPC will also support 16x PCIe graphics cards. Intel launched channel sales of its BTX products on November 15. Before then, BTX based PCs had been only available through OEMs. Intel claims it introduced the BTX form factor to meet the growing need for smaller, sleeker and cooler PCs. Compared to ATX motherboards, BTX boards will run cooler and quieter since the improved motherboard layout and chassis design deliver an increased airflow to high-power components and require fewer fans and lower fan speeds, an Intel press release stated. Shuttle estimates that 20% of its XPC shipments this year will be PCIe systems, while 80% will be AGP-based. The company expects to increase its ratio of PCIe systems to 50% next year. Intel-based systems will account for 65% of the company’s XPC shipments this year, the company added. In related news, Shuttle confirmed that it will debut its 16x DVD Dual DL burners next week. The burner will be available in assorted colors, including white, silver and black and will be sold separately, as opposed to bundled with the company’s XPC barebones systems. Shuttle XPC-SB86i Photo: Shuttle Taiwan. Shuttle 16x DVD Dual DL burner-CD40 Photo: Shuttle Taiwan.

Intel yesterday introduced a series of BTX (Balanced Technology Extended)-compatible products, including boxed processors, thermal modules, motherboards, chassis and power supplies in Taipei. The products will be sold worldwide through channel distribution. Previously, BTX-based PCs had only been available from OEMs, but with the release of these boxed BTX-compatible products, worldwide channel customers can now provide BTX systems as well, according to an Intel press release. With support from a number of leading vendors and OEM makers, Intel expects the BTX form factor to become the mainstream for the PC industry by 2006, said Stanley Huang, Intel’s director of marketing and business management for the Asia Pacific region. Some sources at Taiwan makers of small-form-factor (SFF) systems said that the introduction of the BTX form factor systems may negatively affect the future development of SFF systems. However, sources at Shuttle Computer, the leading designer and manufacturer of small-form-factor (SFF) computers, said that the impact of BTX form factor system on sales of its SFF PCs, the XPC line, will be limited. The sources said that Shuttle will also cooperate with Intel to develop and market BTX-compatible systems.

Taiwan-based Shuttle Computer, a designer and manufacturer of small-form-factor (SFF) computers and accessories, announced yesterday that it will begin marketing complete systems from its XPC line of small-form-factor (SFF) computers worldwide. The company already markets complete XPC systems in the US and some European countries. Shuttle aims to ship about 10,000 complete XPC systems a month in the fourth quarter of this year, including 5,000 units for international markets and 5,000 units for the domestic market, according to company chairman David Yu. Yu said that Shuttle began shipping complete XPC-branded PCs in the US market in May and to Europe in September. The company’s total SFF PC shipments, including barebones units, are expected to increase 20% this year from 650,000 units in 2003. The company also plans to ship 800,000 units in 2005, Yu asserted. Yu expects shipments of complete XPC systems to account for 15-20% of Shuttle’s total shipments next year. Yu also said that Shuttle’s gross margins will improve substantially in 2005 since its complete systems will carry price tags ranging from US$700 to US$1,000, compared to an average of US$200 for its barebone SFF PCs. Shuttle displays its small-form-factor products Photo: Allen Lin, DigiTimes

AOpen, a manufacturer of optical disc drives (ODDs), motherboards and barebone PCs, has decided to overhaul its strategy and will focus on barebone systems, according to company sources. Currently, ODDs and motherboards account for 50% of AOpen’s total revenues, while small form factor (SFF) PCs and system solutions form the remaining 50%. The proportion of SFF PCs and system solutions should increase substantially by year-end, the sources stated. The company posted a record loss of NT$660 million in the first half of this year, with the losses stemming mainly from the decreased value of its ODD inventory as well as royalties paid for patented ODD technology. With its production concentrating more on system solutions, which normally carry higher gross margins, the company hopes that its operations will be back on track starting in the fourth quarter or early next year.