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Dell faces hurdles in luxury laptop push

Dell's ultra-sleek Adamo may be ill-timed and grasping for cachet that's not there.
Gizmodo summarized its review of the Adamo by saying: "Just don't dare buy this computer until Dell comes to their senses and realizes that $2,000+ is absurd for a 4-pound laptop with no graphics muscle."
Though I think Gizmodo misses the mark about "graphics muscle" (ultraportables are not designed or marketed as graphics powerhouses, or anything close to it), the reviewer is right about price--and high price implies cachet. Only Apple (and maybe the ThinkPad x301) can command the kind of cachet that demands $2,500 for a high-end laptop (i.e., the MacBook Air).

From top: Dell Mini Netbook, Apple MacBook Air, Dell Adamo
(Credit: iFixit / TechRepublic)
But there's a greater force conspiring against the Dell Adamo and even the Apple MBA: the Netbook.
High-end Netbooks, like the just-announced 11.6-inch Acer Aspire One, are priced well below $700, making it hard to plop down $2,700 for the 1.4GHz Adamo. Yes, the four-pound Dell is a stunning, superior design (0.65-inches thick, machined-aluminum chassis) with better hardware (Core 2 processor, 128GB solid-state drive standard, 13.4-inch 16:9 HD display with edge-to-edge glass) . But is it $2,000 better? In the age of the two-pound $500 "luxury" Netbook, definitely not.
And it's going to get worse. The Netbook's cousin-to-be, the cheap ultraportable, is going to make things even more uncomfortable for the Adamos of the world. A wave of $500-$900 ultrathin MacBook Air-like laptops are expected this summer. If these become popular, they will not only threaten the Adamo but possibly Netbooks too. (The Hewlett-Packard Pavilion dv2 is one of the first of many inexpensive ultraportables to come).
At the very least, this new category of laptops could push Netbooks down into the $100 to $300 price tier, instead of the typical $300 to $500 seen today.
Don't want a Netbook? Even "pricey" ultraportables can be had for under $1,300. A refurbished 1.8GHz MacBook Air with a solid-state drive is available today for $1,299 (not $1,099 as originally stated) direct from Apple (in my experience, many refurbished units are cosmetically new, but not without problems: see comments at bottom.)
Still want to fork over $2,700? Didn't think so.
(See: "Cracking Open the Dell Adamo" at TechRepublic.)
Note: the comment above about refurbished units revises the original text that said many refurbished units are "virtually new." This was stated too simplistically and did not accurately characterize the experience that I have had with refurbished laptops.

Server start-up taps IBM-Intel tech, eyes Web 2.0

A start-up founded by former Sun Microsystems computer scientists is tapping IBM and Intel hardware to accelerate the enormous server workloads of burgeoning Web 2.0 businesses.
Menlo Park, Calif.-based Schooner Information Technology announced Monday that it is readying a server appliance based on Intel's newest Nehalem processors and its solid-state drives. The first products are due by the end of May with volume shipments in the third quarter of 2009.
Hewlett-Packard and Fusion-io said recently that they are working on analogous technology and had achieved extremely high performance using Fusion-io's solid-state drives running on HP servers.
Schooner Information Technology's President and CEO John R. Busch was formerly research director of computer system architecture and analysis at Sun laboratories. Chairman and CTO Tom McWilliams was a lead engineer at Sun, working on server architecture and advanced CAD tools. Prior to that, McWilliams was a director in the MIPS division of Silicon Graphics. Both men were involved in moving Sun to multicore server architectures, according to Busch.
The company is funded by CMEA Capital and Redpoint Ventures. The current total investment is $15 million.
In a phone interview Monday, CEO Busch explained that the company has set out to fuse standalone high-performance server technologies into a faster organic whole. "Computer companies are pretty much selling boxes while others are selling networking. They're basically just selling component technologies," he said. "If you just speed up the processor or speed up the interconnect or add in flash drives, it will have a small effect."
"The observation I had when we started the company was that we really need to make a shift and we really need to put the middleware application and (our) new operating environment together with these technologies--tightly coupled with parallel flash memory and with Intel multicore processors. As opposed to loosely coupled, in order to bring their real inherent benefits through," Busch said.
Busch continued. "We pulled together a team of scientists and engineers and did the workload characterization and the modeling and the engineering and the optimization and we've been able to accomplish an eight times improvement in throughput performance," he said.
Michael Pray, vice president of sales and marketing, talked about specific challenges facing its customer base. "I would use the example of a social networker. When a person signs into their home page, there's a ton a data options that are returned back on those pages. The pain is around having to scale to meet the challenge. The more and more users you get, the more and more successful you are. You're kind of a victim of your own success with regards to the amount of data you need to serve up and continue the user response times," he said.
The company's core innovations, such as "extremely fast parallel thread switching between the (processor) cores," are, in essence, technologies to accelerate processing on the server computer.
The company uses IBM System x3650 M2 servers outfitted with Intel Nehalem processors and 512GB arrays of Intel solid-state drives. The products will be co-branded with IBM and will use IBM after-market support.
"We're big fans of (Intel) Nehalem multicore processors as well as their flash drives. We're in close cooperation both with their systems group with the processor as well as their NAND (flash) group," Pray said.

Intel issues solid-state drive fix

Intel said this addresses a problem first introduced by technology Web site PC Perspective in February. "This update implements several continuous improvements and optimizations to the drive algorithms including a resolution for a performance issue first reported by the PC Perspective," Intel said.
The PC Perspective review, titled "Long-term performance analysis of Intel Mainstream SSDs," claimed, among other things, that the Intel X25-M solid-state drive would degrade in performance as a result of "internal fragmentation."
"Keep in mind that the risk of a typical PC user experiencing this issue is very low," Intel said Monday. "We are offering this firmware download to our OEM customers and any consumers who have purchased the drives. Consumers with questions can contact their PC maker or visit Intel support for more information."
A Monday post by PC Perspective said that "the Intel guys were surprisingly down to earth and receptive to our input" and that Intel "replicated our findings in their lab. An added bonus was they...passed us a new firmware and were asking for our feedback."
Intel did not recognize the problem initially, saying in February: "Our labs currently have not been able to duplicate these results."

Intel profit down, but PC sales may be recovering

Intel's first-quarter profit fell about 56 percent from a year earlier, but Chief Executive Paul Otellini said PC sales were bottoming out.
Net income was $647 million, or 11 cents a share, down from $1.4 billion in the year-earlier period. Revenue was $7.1 billion, down about 27 percent from the $9.7 billion reported in the same period last year. Wall Street estimates were around 3 cents a share on revenue of $7 billion.
"We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns," said Otellini, in a statement.
"I believe the worst is now behind us from an inventory correction and demand level adjustment perspective," Otellini said in prepared remarks during the company's earnings conference call Monday afternoon. He added that notebook inventory has now returned to normal levels.
"Everything I've seen suggests that the industry is at a new baseline," Otellini said, responding to an analyst's question during the conference call. "We're starting to see the normal (market) seasonality...and every sign we've seen in terms of markets recovering suggests that we're likely to see typical seasonality in the second half," he said.
Otellini also said in prepared remarks that the company had reduced inventory levels 19 percent below fourth-quarter levels and the number of employees had been reduced by 1,400 from the fourth quarter.
On the new product front, Otellini said that Intel's first 32-nanometer chip, Westmere, has been "pulled in" and will be shipping later this year.
The company said it is not providing a revenue outlook at this time.
"Due to continued economic uncertainty and limited visibility, Intel is not providing a revenue outlook at this time. For internal purposes, the company is currently planning for revenue approximately flat to the first quarter," Intel said.
Other Intel first-quarter 2009 earnings highlights:
Gross margin, a crucial indicator, was 45.6 percent, lower than the 53.1 percent in the fourth quarter.
Gross margin percentage in the second quarter is expected to be in the mid-40s.
Revenue from the Atom processor and chipsets was $219 million, down 27 percent sequentially.
Intel expects shipments of recently-introduced Nehalem processor to hit one million this month.
The average selling price for all microprocessors was approximately flat sequentially.
For full-year 2009, capital spending is expected to be slightly down from 2008.

IBM, Samsung, others team up on next-gen chips

IBM, Samsung Electronics, STMicroelectronics, and others are teaming up on the development of next-generation chip technology for small, low-power devices with one wary eye on Intel, which is expediting its move to chips with smaller geometries.
(Credit: IBM)
IBM and its semiconductor technology alliance partners are announcing the availability of 28-nanometer (nm) chip technology, a little more than a generation beyond the 45nm technologies currently used by Intel and Advanced Micro Devices in their latest chips.
The first products using chips based on this technology are expected in the second half of 2010, an IBM spokesman said. Devices will include smartphones and consumer electronics products.
The largest, single countervailing force to the IBM-led group is Intel. The Santa Clara, Calif.-based chip giant's chief executive, Paul Otellini, said Tuesday in a first-quarter earnings conference call that Intel is "pulling in" the release of "Westmere" chips based on 32nm technology and will ship silicon later this year.
Generally, the smaller the geometry, the faster and more power efficient the chip is.
The IBM alliance--which also includes the AMD manufacturing spin-off Globalfoundries, Chartered Semiconductor, and Infineon Technologies--are jointly developing the 28nm chipmaking process based on the partners' "high-k metal gate" (which minimizes current leakage), low-power complementary metal oxide semiconductor (CMOS) process technology.
The technology "can provide a 40 percent performance improvement and a more than 20 percent reduction in power, in a chip that is half the size, compared with 45nm technology," IBM said in a statement. "These improvements enable microchip designs with outstanding performance, smaller feature sizes and low standby power, contributing to faster processing speed and longer battery life in next-generation mobile Internet devices and other systems."
IBM said customers can begin their designs now using 32nm technology and then transition to 28nm for density and power advantages without the need for a major redesign.
One prominent customer is U.K.-based ARM, whose basic chip design has been used in billions of devices all over the world. ARM is collaborating with the IBM alliance to develop a design platform for 32nm and 28nm technology and is tuning its Cortex processor family and future processors to exploit the technology's capabilities, IBM said

One tale of woe: Apple, HP laptop 'refurbs'

Refurbished laptops from Apple and Hewlett-Packard are relatively inexpensive and, in many cases, virtually new. But it all depends on how you define "new."
Let me begin by saying that I would not recommend a refurbished laptop. That's just my experience, of course. I recognize that others have had positive experiences and that some would swear it's like buying a new computer, just cheaper. But I have purchased two refurbished laptops--one from Apple, another from HP--that were both defective out of the box.

"Refurbs" really a great deal?
Apple case first. I recently purchased a refurbished Apple MacBook Air. Unpacking it revealed a pristine, brand-new looking MBA. Until I turned it on. The screen was dimmer than the screen on a one-year-old Air I have been using and the backlighting was uneven. In short, the bottom 25 percent (roughly) of the screen was noticeably darker than other 75 percent of the screen.
Moreover, upon closer inspection I could see that the screen had rather prominent dark blotchy areas (more prominent than the "normal" blotching you get on these screens). Ironically, the much older Air did not exhibit this. Now, I realize that I may not have considered the screen defective if this had been my first Air and I hadn't been using another MBA (which, by the way, I had intended to pass on to someone else) that had a gorgeous, uniformly backlit screen. But nobody, I would submit, likes trading down from something great to something less than that.
And what is the single biggest difference (aside from specifications) between the two Airs? The non-defective, problem-free one was purchased new.
I have a lot of scary, unpleasant theories about refurbs--none of which could ever be proven unless I actually worked at a PC manufacturer--but I think I can safely say this much: some refurbs are less than meets the eye. They may look pristine on the outside but mask internal problems.
Which brings us to my HP business laptop refurb. This is a much longer story that I will summarize briefly as follows: out of the box, the keyboard was defective and the unit randomly shut down (that latter problem, I concluded, was due to overheating). I had to go through a pretty painstaking series of steps to get both of these problems resolved.
The moral of the story may be this: you get what you pay for. A buyer of a refurbished HP business laptop can save a lot of money--sometimes more than 50 percent off the list price of a new unit. The cost savings on a refurbished MacBook that is still being actively marketed by Apple is less: in the case of the Air, a few hundred dollars.
So, what is a refurbished laptop? Here's what HP says on its FAQ page:
"Stringent guidelines are followed. All units are brought up to fully functional condition, with defective parts replaced by working parts...Refurbished business products go through two quality control checks before being re-boxed for sale to ensure high reliability."
I'm sure both companies strive to offer just-like-new refurbished laptops but my experience is that refurbs may be more trouble than they're worth. I would like to hear the experiences readers have had.