Small-form-factor (SFF) barebones system suppliers Shuttle and AOpen reported their financial results for the first quarter, with Shuttle recording a profit and earnings per share (EPS) of NT$0.11 while AOpen suffered a slight loss of NT$0.11 per share. Although phasing out its motherboard production dragged down Shuttle’s first quarter revenues 33% on year to NT$1.32 billion, the company still managed to increase its margins to 11.59%, helping it turn an overall profit. Shuttle also reported losses of NT$34.24 million on exchange rate fluctuations. Shuttle shipped 146,000 barebone systems in the first quarter. AOpen, which is currently targeting barebones systems for the notebook market as well as the SFF market, saw its on-year revenues drop 22% and reported margins of 6%. The company shipped 50,000 barebone systems in the firs quarter.

Shuttle shipped 48,000 XPCs in March, bringing its shipment total for the first quarter to 146,000 small-form-factor (SFF) PCs, according to the company. The March shipment total was boosted by the release of the XPC SN25P system at the end of February. Shuttle shipped about 10,000 units of the Nvidia nForce4-based SFF PC last month and it expects the volume to remain at that level in the near future. The company also stated that its first quarter shipments were split 60:40 between Intel and Advanced Micro Devices (AMD) XPCs. However, market sources stated that Shuttle plans to introduce 8-10 new Intel-based XPCs this year, including a 945G system in May. Although the company’s revenues only reached NT$960 million in the first quarter, down 44% on year, Shuttle was quick to point out that was mainly due to it exiting the motherboard business. In addition, while most motherboard makers are seeing their gross margins slide downward to single digits in the ultra-competitive motherboard business, Shuttle estimates that its gross margins topped 15% in the first quarter.

Although late to the game in the small-form-factor (SFF) PC segment, Albatron believes the experience it gains in the SFF PC segment this year will help it become a key vendor once the market transitions to the pico-BTX form factor starting next year, according to the company. Albatron announced its first SFF PC, the ABox, last November and just started shipping the product earlier this year. The company is currently targeting the Japan and Australia markets with the Abox. The Intel 865G based-ABox has most of the standard features expected from a SFF PC, including a cube design, several front access ports, and an AGP and PCI slot. Albatron did add some features to the system that it believes will help differentiate the product from other SFF products, including a 40-pin connector for connecting all front panel ports to the motherboard at once. Albatron also added more connectivity features, such as a mini-PCI slot and a USB connector, for connecting the company’s Albalink wireless module. The system also features a specially designed fan/heatpipe solution for minimizing noise. Although the product is quite vanilla, Albatron claims that it has entered the SFF market mostly to get its toes wet as a system maker while it gears up for production of pico-BTX products. Because Albatron is a young company, it entered the motherboard and graphics card business as a latecomer. The company now feels that the PC industry will soon be transitioning to BTX products, and it is optimistic that is will be able to be a key competitor in the pico-BTX market from the start, once the market transitions. Albatron stated that it is hoping to produce it first pico-BTX solution by the fourth quarter of this year, but admitted that the mainstream market may not transition to BTX solutions until next year. Although BTX solutions are eventually supposed to less expensive to produce than current systems, the market is not yet developed and the overall price is still too high. Another source in the market recently estimated that BTX motherboards will only account for about 5% of global shipments by the end of this year, well behind Intel's expectations, while SFF market leader Shuttle also forecast that demand for BTX (Balanced Technology Extended) systems will not pick up until next year. Albatron ABox SFF PC Photo: Company

As Skype has become increasingly popular as the software of choice for online communications, more manufacturers are developing Skype-related PC peripherals including headset microphones and USB headphones with a built-in Skype API (Application Program Interface). Jazz Hipster, which specializes in digital audio speakers, recently introduced its Bzcom J1302 desktop microphone with built-in speakers, a solution for use with Skype for online communications, such as chat rooms, online meetings, voice-over IP (VoIP), online radio and karaoke. The product will begin shipping in May. Jazz Hipster combines the functions of microphone and PC-use USB speakers into the Bzcom J1302, enabling users to just turn on the speaker and chat when using Skype, rather than needing to don headgear and microphone and talk like an operator. Jazz did not introduce any new integrated technologies into the J1302, but instead focused on design and functionality. With dimensions of 10x17x12cm (wxhxd), the Bzcom J1302 is a compact unit that features one microphone (built into the base), two 1.75-inch full-range speakers (located on each side of the device), one USB connector and one headphone jack. Jazz also provides a user guide and a utility CD. There is no power adapter for the Bzcom J1302, as it is powered through USB. The USB cable also serves at the audio connector to the PC. Overall, the microphone quality is clear enough so that the product can be shared among several users, and the Bzcom J1302 can be used by small businesses looking to use the free Skype service as an inexpensive audio-conferencing solution. However, even with the simulation software provided on the utility CD, the unit can only reach a certain degree for 3D sound effects. Users requiring high performance sound quality may be disappointed by the weak sound that the Bzcom J1302 provides. We suggest plugging PC speakers into the headphone slot for better sound quality. Two 1.75-inch full-range speakers on each side of the Bzcom J1302 Specifications Bzcom J1302 Item Detail Speaker power rating 1 watt (0.5wx2) Impedance 44 ohm (parallel) Inputs USB 1.1 Magnetically shielded Yes Power adapter require No Microphone Embedded Hardware compliant OS Window 98 SE/2000/ME/XP Mac OS9/OSX Capabilities USB bus-powered and easy installation Speaker and microphone functions provided Sound reception up to five meters away Clear voice and echo cancellation support Provides software 5.1 virtual effect and X-ear 3D performance Application Chat room, online meeting room, VoIP, online radio and online karaoke Source: Jazz Hipster, compiled by DigiTimes, April 2005. Appearance The Bzcom J1302 has an avant-garde design, looking perhaps like a spaceship bow from a science-fiction movie. The front of the unit has a status light that shines with an aesthetic blue light when the unit is being operated. In addition to the two speakers, four function keys are located on the side of the device: two for controlling volume (up/down), one microphone mute (on/off) and one speaker mute (on/off). The function keys are also lit with a blue hue when the system is being operated. Although the function keys have a rubber feel, they are still a bit stiff and pressing the buttons is not as easy as most users would expect. It would be better if this matter were altered. Four function keys and one headphone jack on the side of the device USB slot on the back of the device The key to the Bzcom J1302 is the microphone, and it is very sensitive. You can even hear the fluctuating electric current while the systems is being operated. By using the microphone mute button, Jazz also provides users with a convenient an on/off switch for the device, a thoughtful design for users who do not wish to access software to start and stop conversations. Although the microphone is hidden inside the base of the unit, recording sound is still clear. When the microphone is turned off, the top of status light turns from blue to pink. Easy installation When you connect the Bzcom J1302 to any Windows XP computer, you can just plug it in without needing any driver installation. In addition, the CD features sound effect utilities, including Software 7.1 Virtual effects and X-ear 3D technology. The utilities help the device deliver better 3D sound by mimicking effects when users listen to music. However, despite the maker considering these feature very carefully, it is not easy for a normal user to notice the improvement. In addition, the Bzcom J1302 can connect with Mac computers with the OS9 or later versions. Sound-sage controlling system Sound performance The sound performance of the Bzcom J1302 cannot compete other computer speakers that cost NT$300-500 (US$9.50-16), because it lacks high- and low-pitched rhythm. The design is much more suited for use of online conversations through Skype. Conclusion With its lower price, the Bzcom J1302 desktop microphone can compete with other voice conferencing systems for commercial applications. Users who have used the device as a voice conferencing platform have commented on the depth of sound, which provides a better acoustic ambiance than that of all users speaking directly into a microphone. The device seems especially suited for getting a group of people together to have an argument over Skype, as the microphone will prevent the combined noise level from getting out of hand.

Intel introduced its 854 platform for the consumer electronics application at the Intel Developer Forum (IDF) in Taiwan, held from Apr 11-12. Several makers have begun incorporating the solution into their products, with volume production currently getting under way, according to Glenda Dorchak, vice president of Digital Home Group and general manager of the Consumer Electronics Group (CEG) at Intel. Products using the Intel 854 chipset include set-top boxes (STBs) from Tatung and HDD (hard disk drive) DVD players from Toshiba, said Dorchak. Both products were showcased at IDF Taiwan. The 854 platform is built using an integrated graphics core offering support for up to 2GB DDR333 and the platform supports Celeron CPUs. The platform also features a 10/100 LAN controller and the chipset integrates six USB and two ultra ATA/IDE connectors. For shortening time-to-market, the platform supports various software encoding/decoding and Microsoft Windows CE 5.0.1 support. Dorchak stated the company will be able to push forward it agenda for digital home products within three years, by which time demand for consumer electronics products worldwide will have climbed. Intel spreads the word Photo: Allen Lin, DigiTimes.

With the recent introduction of its i915GME desktop motherboard for the Intel Pentium M processor, AOpen has shown that it is committed to developing the market for Pentium M desktop motherboards, especially in Japan. AOpen was the first to introduce a Pentium M desktop board, the i855GMEm-LFS, which hit the market in the fourth quarter of 2004. Now, with the i915GME, AOpen is the first to introduce a PCI Express (PCIe) enabled Pentium M desktop motherboard. The board has all the bell and whistles expected from a PCIe motherboard, including one PCIe x16 slot, one PCIe x1 slot, SATA 2 support and integrated DirectX9 graphics. In addition AOpen has tweaked the design so that the board can support DDR memory, even though the 915GM chipset only supports DDR2 when used in notebooks, according to sources at AOpen. Of course the big selling point of the desktop motherboard is its support for Pentium M CPUs. Mobile CPUs run a lot cooler than desktop CPUs, with AOpen stating that the power consumption of the Pentium M processor is only one fourth that of the Intel desktop LGA775 Pentium 4 processor. For vendors looking to design compact systems, a Pentium M board provides an ideal starting point, as thermal issues are much easier to avoid. AOpen has already shown that these boards can be used in small-form-factor (SFF) PCs and the company is planning even more compact designs, though the release of its MZ 855 SFF PC has been delayed until the end of April, according to the company. AOpen also seems to grasp the fact that, since this is a brand new market, much of the innovation will come from the market itself. So, the company has thrown a slew of features onto the i915GME motherboard, almost as a challenge to its customers to come up with something innovative. The i915GME features dual Gigabit PCI Express LAN and Intel high definition audio 7.1, while supporting DVI, YPbPr (for connecting to HDTVs), D-Sub, S-Video and a D-connector option for connecting to displays. The motherboard also has two standard PCI slots. However, users looking at Pentium M boards as possible building blocks for Windows-based Mac-mini types of products may have to pass on the i915GME, as it will have a street price of about US$300, according to sources at the company. Although AOpen has stated its desktop Pentium M motherboards are currently available globally, sources at the company noted that AOpen will focus its sales on Japan. Industry sources agreed that Japan will end up being the test market for Pentium M desktop systems. Intel has made more Pentium M CPUs available in the channel there, and users are willing to pay more for a system that meets their requirements, which in Japan tends to be a need for something compact and quiet. AOpen may be the right vendor for the Japan maker as well. Although the company stated it shipped about 100,000 XC Cube small-form-factor (SFF) PCs last year – compared to about 600,000 for Shuttle – it was the number one SFF barebones vendor in Japan. AOpen i915GMm-HFS Pentium M desktop motherboard Photo: Company

Shuttle anticipates that demand for BTX (Balanced Technology Extended) systems will not pick up until next year, while projecting that 5% of the 750,000 XPCs it expects to ship this year will be BTX systems. The company will roll out three new BTX XPCs this year, each of which will be built using the pico-BTX form factor, according to Ken Huang, company vice president of systems development unit. Huang indicated that Shuttle has no plans to introduce any XPCs built using the slightly larger micro-BTX form factor. Huang stated that demand for the systems will grow starting next year, as consumers still need to be educated about the Intel-developed standard and a greater supply of components need to be made available in the market. For most companies it is still relatively cheaper to produce products using ATX standards, as power supplies and heat dissipation modules for the BTX platform are still US$10-20 more expensive than similar products used on the ATX platform, Huang claimed. Shuttle’s perspective on BTX Source: company

Although forecasting no revenue growth for this year, Shuttle maintains that quitting the motherboard business has reduced margin pressure from its business and allow the company to enjoy increased profits, according to company product marketing vice president Jonathan Yi. However, Shuttle is currently feeling the short-term effects of not having motherboards contribute to its sales. Over the first two months of this year, the company’s revenues are down 40% on year, and revenues for 2005 should stay flat at about NT$7 billion. Yi indicated that the company shipped about one million motherboards last year, with the business contributing NT$2 billion to the company’s revenues, or about 30% of its total sales. However, Yi estimates that by removing itself from the highly competitive motherboard business, Shuttle will be able to focus on its successful small-form-factor (SFF) PC business and be able to maintain margins of over 15%. Shuttle was one of only five Taiwan-based motherboard vendor to record gross margins over 10% in the third quarter of last year, and only Asustek and DFI had margins over 15%. In addition, gross margins have been steadily declining for motherboard vendors over the past few years, except for companies that have managed to target niche markets, a source in the market stated.

Jetway Information has shifted its focus in the small-form-factor (SFF) PC segment away from barebone system design toward production of SFF motherboards for its OEM clients, according to sources at the company. However, Jetway will continue to market its current line of MiniQ SFF systems, the sources added. Although the company has won several industry awards for its SFF designs, Jetway believes its core competency is in production. Therefore, the company will look to work with OEM clients that specialize in chassis design, while Jetway concentrates on motherboard manufacturing. Most of Jetway’s current OEM partners are located in Korean and Japan. The company is probably most well known in the SFF market for its MagicTwin series, which are systems that allow two users to operate the same PC concurrently, using separate keyboards, mice and monitors. However, at the recent CeBIT show in Germany, Jetway did not even list barebone PCs as one of its products in the show’s catalogue. The sources stated that the motherboard company has been developing more products, such as graphics cards, LCD monitors and MP3 players, that take advantage of its strength at board-level production. According to the company’s website, Jetway has a production facility located in Dongguan, Guangdong Province (China), which has a monthly capacity of 300,000 motherboards and 50,000 systems. So far, Jetway’s strategy seems to be paying off, as the company revenues of NT$4.75 billion last year beat out its financial projection by 10%, and represented a 31% increased over 2003. The company also shipped 1.1 million motherboards and 639,000 LCD monitors last year, while having monthly shipments of 150,000-160,000 graphics cards. In addition, Jetway is one of few Taiwan motherboard companies to be able to continue its growth into 2005, as its sales this year are up 5% over last year.

Small-form-factor (SFF) PCs and servers can now adopt multi-processing with the unveiling of VIA Technologies’ EPIA DP-310 motherboard at CeBIT 2005. The Mini-ITX (17x17cm) board is powered by two 1GHz Eden-N processors coupled with the company’s CN400 chipset featuring DDR400 memory support, integrated 128-bit UniChrome Pro graphics and hardware acceleration for MPEG-2 and MPEG-4. Peripheral features of the board include one Gigabit Ethernet port, two Fast Ethernet (10/100Mbps) ports, one PCI slot, one Mini-PCI Type IIIA connector, one Ultra ATA/133 connector, two Serial ATA channels (with RAID support), up to four USB ports and VIA’s Vinyl Six-TRAC audio codec. “In bringing dual-processing to the Mini-ITX platform, VIA has raised the bar yet again for small form factor innovation on the x86 platform,” stated Richard Brown, associate vice president of marketing at VIA. According to VIA, the new motherboard has been released to target “corporate system integrators, embedded application developers, enthusiasts, and other small-form-factor system builders.” The company mentioned so-called “appliance servers” as one of the possible application areas for the EPIA DP-310 and other boards with similar features. VIA defines these servers as “network-enabled, service-dedicated devices designed to deliver a single service or function across the corporation or a workgroup.” Following this definition, a typical appliance server might manage functions such as web caching, security operations (for example firewall, anti-virus, VPN or encryption), personal storage and backup or Internet access. A few lesser-known companies, such as Bleu Jour from France, IPC2U from Germany and Mirra from the US, were named at CeBIT as system integrators supporting the EPIA DP-310. According to VIA’s estimates, the board will begin mass production at the beginning of May. Finished products are expected to be ready for market in the second half of this year. VIA’s EPIA DP-310 board is powered by two 1GHz Eden-N processors The two 1GHz Eden-N processors share a single cooler. Photo: Vyacheslav Sobolev, DigiTimes.com, March 2005.