While the Santa Clara, Calif., company dominates the PC and server markets, it has struggled to make inroads in smartphones and tablets because its chips are viewed as too power-hungry compared to designs based on ARM Holdings PLC architecture. But Intel hopes new lower-power chips and advanced-process technology will help it break into the market.

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Although the new Windows offers a number of upsides, including the fact it runs on a wider range of processors, such flexibility comes at a cost.

Systems that run Windows 8 using low-power ARM processors will be able to run all of the new-style Windows applications, but it appears few traditional Windows programs will run. Microsoft demonstrated a technology preview of Office running on ARM back in January, but Sinofsky said that in general older Windows applications won’t run on ARM-based machines.

That’s not to say Microsoft didn’t make the right choices when it comes to Windows 8. Were Microsoft to have brought over all of its legacy to the new chips, it might well have lost the long battery life and other benefits that ARM-based systems can provide.

A strong case can be made that this break with the past is exactly what Microsoft needed in order to compete with a new generation of devices running operating systems designed with mobility in mind.

However, the choice means that Microsoft and its partners will need lots of new apps to make Windows 8 a success. Indeed, a big part of this week’s Build conference will be equipping developers with the tools they need to write such programs and convincing them of the upside of doing so.

Recognizing this, some of Redmond’s partners are taking matters into their own hands. Nvidia, for example, plans its own program to convince developers to write new-style Windows apps.

“We’re going to be investing in our own effort to get developers on board,” Nvidia General Manager Rene Haas said in an interview.

But if the company faces challenges getting developers to write the new apps, Haas said he is not worried about finding PC makers willing to make machines with the ARM-based processors. Such systems, he said, can be slimmer and cheaper and offer better battery life than those running traditional PC processors from Intel and AMD, he said.

“We’ve seen very big OEM interest,” Haas said, using the industry term for PC makers. “Virtually every OEM around the world wants to do something with Windows-on-ARM.”

Related posts

• Exclusive: Making Sense of Our First Look at Windows 8
• Windows 8 Gets Ready for Its Big Debut
• Gearing Up for Microsoft’s Big Week
• Microsoft Details Windows 8 at Build Conference in Anaheim
• What We Just Learned About Windows 8
• Microsoft Releases First Test Version of Windows 8
• Windows 8 Forces Some Compromises After All
• Boys and Their Toys: Developers Rush to Get Windows 8 Tablets
• Windows 8 Shows Its Server Side
• Ballmer: 500,000 Downloads of Windows 8 Since Last Night

With the rise of the smartphone and the emergence of the tablet, that threat has become real. Now, as the pressure mounts, Microsoft is due to make its case for why Windows can not only hang on to the desktop, but finally deliver on the tablet promises it has been making for a decade.

At a developer conference in Anaheim, Calif., the company is expected to offer a great deal more detail on Windows 8 — the next version of the operating system first shown at our D9 event in June. Windows 8 boasts a touchy-feely new interface, literally, along with a whole new means for writing Windows apps. Also, in a shift, Windows will run on the same kinds of ARM chips that power many of today’s smartphones and tablets.

With the changes, Windows chief Steven Sinofsky says Microsoft is in a position to deliver a “no compromise” operating system that is equally at home on small tablets and powerful desktops.

Some are hoping that Microsoft would go a step further and announce some sort of plan to allow Windows Phone apps to run on Windows 8. That, however, seems unlikely. While Windows and Windows Phone may someday converge, for now the two remain on different architectures.

Whatever Microsoft has to say, AllThingsD will be on hand to make sure our readers don’t miss a beat.

Redmond will also be talking about its bottom line, holding a financial analysts’ meeting on Wednesday. And since it is bringing out its big guns, AllThingsD is doing the same, with Kara Swisher joining me in Anaheim to bring her wit and wisdom to that part.

Doug Freedman, an analyst who covers the chip sector for Gleacher & Co. in San Francisco, trimmed his estimates on both Intel and on its smaller rival Advanced Micro Devices amid a weakened PC market that is running well behind the typical seasonal patterns. Last week, market researcher Gartner reported that worldwide PC shipments grew less than three percent over the year-ago period, as consumers remain focused on tablets and smartphones and hold off on upgrading their desktops and notebooks.

At a high level, that’s not good news for Intel and AMD, both of which have yet to penetrate the tablet market in any meaningful way. And both are grappling with the impending entrance of competing chips — based on designs from ARM, from vendors like Nvidia and Qualcomm — burrowing their way into new consumer notebooks.

In a July 15 note to clients, Freedman cut his estimates on both Intel and AMD for the quarter ending in June and the quarter ending in September. He expects Intel to report sales of $12.7 billion, which is about $100 million below the street consensus of $12.8 billion. He also expects Intel to report per-share earnings of 53 cents, which would amount to a two-cent improvement over the year-ago quarter.

The quarter being reported today isn’t the story, however: It’s September. Typically it’s a seasonally strong quarter, as college students head back to school with new notebooks under their arms. This year Freedman thinks PC sales will lag behind historical patterns. He trimmed his September quarter revenue forecast to $13.16 billion, down from $13.43 billion — or $300 million below the street view — and knocked it down by two cents to 59 cents, a penny above the street.

Intel has, in recent quarters, taken a fairly aggressive stance on the state of the PC market, and has criticized analysts for fanning investor fears. “Management should offer more subdued PC unit growth expectations thereby alleviating investor fear that Intel is setting its bar too high,” Freedman wrote. One other thing Intel has in its favor is that the average selling price of chips is edging upward, which should give it a slight hedge against the weaker market. This should help keep gross margins — a key metric for Intel — in the higher end of the 59 to 63 percent range the company said to expect. He also says that Intel could deliver a surprise with better-than-expected results from other parts of its operations, namely its flash memory unit, which makes solid-state hard drives.

For AMD, which reports its results tomorrow, the picture is a mixed bag. The search for a new CEO is now in its sixth month, with no sign of being resolved anytime soon. Freedman doesn’t expect a CEO to be named today nor in the near term. Finding an external candidate is proving harder than expected. (Note to Freedman: You don’t say.) Pressure on its share price, thanks to short-sellers, has created a buying opportunity in the near term.

Even so, Freedman trimmed his estimates for AMD’s June and September quarters. He expects AMD to report sales of $1.55 billion, down from $1.6 billion previously, which would amount to a four percent decline in year-on-year sales. He also shaved a penny off his EPS estimate to nine cents from 10. For September, he expects AMD to report sales of $1.63 billion, down from $1.7 billion before, and cut his EPS estimate to 16 cents from 20.

I’ll be back later today to cover Intel earnings live. See you then.

Alex Gauna of JMP Securities cut his rating on AMD to “market underperform,” arguing that its Fusion line of chips isn’t winning sufficient business from PC makers. Having interviewed people at PC retailers and at PC manufacturers, he concludes Fusion is going nowhere. He says he was unable to purchase a Fusion-based PC from Dell via its Web site.

AMD’s Fusion processors aren’t winning many positive reviews, Gauna says, indicating a “lack of market interest.” Sales representatives at various online retailers steered his researchers “away from AMD platforms.”

As you might expect, it doesn’t take much to send AMD shares south these days. Intel is far and away the king of the hill in PC and server microprocessors, and chips from companies like Nvidia and Qualcomm based on the designs of ARM Holdings are coming into notebooks and tablets, minimizing AMD’s chances to win business there. He slashed his target price on AMD to $4.50 a share, which would constitute a drastic drop from the $6.80 at which it opened today, having closed Friday at $6.95. By today’s close of regular trading, investors knocked AMD’s shares down to $6.76, a drop of nearly 3 percent.

The day ended however, with AMD shares being defended by analyst JoAnne Feeney at Longbow Research. Dell is not an early adopter of the AMD technology, she says, but will be offering systems using AMD’s Fusion chips — the codename of the specific AMD product is Llano — soon. I heard the same thing from a source at AMD. On top of that, Toshiba and Lenovo are happy AMD customers. Tiernan Ray at Barron’s has a little more on Feeney’s note.

The downgrade came 10 days before AMD is due to report quarterly earnings and amid growing speculation on the company’s ongoing search to find a new CEO to replace the ousted Dirk Meyer. The search is about to drag into its sixth month, and I’m told it won’t be resolved before earnings are announced.

There were reports last month that several A-list executives, none of whom would have realistically considered the job in the first place — Oracle’s Mark Hurd, Apple’s Tim Cook — had turned down approaches by AMD’s recruiting agency, Heidrick & Struggles. Another who topped AMD’s list early on, Pat Gelsinger, the former Intel CTO who’s now in line to succeed Joe Tucci as the CEO of storage giant EMC, even said he told AMD no not once but twice. A lot of those people, Hurd and Cook especially, are really just names that any recruiter looking to fill a senior position would call in the course of building a list, just to make sure they’ve covered their bases.

The sense of urgency to find a new CEO seems to have dissipated at AMD, though not entirely. With the company running a profit again — its most recent quarter showed a $510 million profit on sales of $1.6 billion — it may be that directors feel they have the luxury of time in finding the right candidate, so they don’t have to rush the process, though obviously they’ll want to get it done soon. Expect the company to face a lot of questions from analysts when it reports earnings on July 21.

“We believe a foundry relationship may be forming between Intel and Apple,” Yeung says. “Our discussions with the hardware supply chain tend to support this belief. Intel has previously acknowledged they would be amenable to such a relationship, under the right conditions.”

Among those conditions, says Yeung: An agreement from Apple to someday convert from an ARM-based core for handsets and tablets to x86, which would essentially give Intel Apple’s chip business. That would obviously be a huge win for Intel, as it stands to gain much from Apple’s market share in smartphones and tablets.

But there is one problem. Apple’s A4 and A5 chips are based on an ARM design and Intel isn’t exactly a big fan of ARM. Asked during Intel’s recent investor meeting if the company would consider fabbing chips based on the ARM architecture, CEO Paul Otellini had this to say: “The short answer is ‘No.’”

A foundry partnership with Apple would require a rethinking of that answer, at least for the short term. And Intel certainly could do it. It has the necessary ARM licenses. It just needs to convince Apple to dump Samsung, which currently handles chip fabrication for it, and migrate its mobile devices over to its forthcoming low-power x86-based chips next year.

In light of recent events, in particular Nvidia agreeing to make ARM-based chips that will be used in forthcoming notebooks and tablet devices and thus setting up a new competitive dynamic with chip giant Intel, the revelation takes on new significance. Note my use of the word “new,” which this arrangement is not. (Update: An Nvidia spokesman tells me the arrangement between Nvidia and Microsoft has been disclosed every quarterly filing for more than a decade.)

Listed in the “Risk Factors” section–“buried deep” as Information Week puts it–of Nvidia’s most recent 10-K filing with the U.S. Securities and Exchange Commission is the following text:

On March 5, 2000, we entered into an agreement with Microsoft in which we agreed to develop and sell graphics chips and to license certain technology to Microsoft and its licensees for use in the Xbox. Under the agreement, if an individual or corporation makes an offer to purchase shares equal to or greater than 30% of the outstanding shares of our common stock, Microsoft may have first and last rights of refusal to purchase the stock. The Microsoft provision and the other factors listed above could also delay or prevent a change in control of NVIDIA.

When I first read it, I thought the date was a typo. Surely this deal was struck in 2011? Then I started looking back through filings from prior years. I went all the way back to the year 2000, when Nvidia filed a 10-K405, a variant of the 10-K that before 2003 indicated that the filing company hadn’t reported its insider trading activity in a timely manner. Here’s the relevant text from that year:

On March 5, 2000, the Company entered into an agreement with Microsoft in which the Company agreed to develop and sell graphics chips and to license certain technology to Microsoft and its licensees for use in a product under development by Microsoft. The agreement provides that in April 2000, Microsoft will pay the Company $200 million as an advance against graphics chip purchases and for licensing the Company’s technology. Microsoft may terminate the agreement at any time and if termination occurs prior to offset in full of the advance payments, the Company would be required to return to Microsoft up to $100 million of the prepayment and to convert the remainder into preferred stock of the Company at a 30% premium to the 30-day average trading price of the common stock.

So for whatever reason Information Week has decided to call attention to an 11-year-old arrangement. If its news to you, you probably don’t have any reason to read Nvidia’s SEC filings. Having been disclosed something like 55 times (five times a year give or take over 11 years), it’s obviously not news to anyone who routinely does read them, such as analysts, investors and pretty much anyone who pays reasonably close attention to Nvidia.

What the arrangement does explain is this, which may be a revelation–if you’re just tuning in to the Nvidia story: Why it hasn’t ever been acquired, or even come close. Nvidia has over the years been the target of repeated takeover speculation, occasionally with Apple or Intel named as the possible acquirer. Robert Cringely wrote just such a column in 2009, arguing that Intel would step up. To Information Week’s credit, Cringely seemed unaware of the role that Microsoft would necessarily play in such an attempted transaction. Speculation about Nvidia being targeted for a buyout has tended to ebb and flow with Nvidia’s stock price since 2006 when its main rival, ATI Technologies, was taken by Advanced Micro Devices.

The arrangement states that if a third party offers enough cash for a stake in Nvidia that amounts to at least 30 percent of the equity, Microsoft has the right to match that offer before Nvidia accepts it. And it is still in force. But it’s helpful to consider it against the backdrop of what was going on in 2000. Permit me, then, to revisit some ancient history.

In 2000, Microsoft put up $200 million to help Nvidia, then a young company with only $375 million in annual sales, to design a chip for what would eventually be called the XBox. In the six days after the deal was concluded, Nvidia’s share price nearly tripled, while trading volume in the shares surged by a factor of six. In fact, it was such a big deal for the company that an Nvidia employee got in trouble with the SEC for insider trading.

Nvidia was a participant in a graphics chip business during a period that proved extremely volatile. Companies that had led the segment were going out of business or splitting into pieces. Later in 2000, Nvidia would go on to buy out the assets of its bankrupt rival 3Dfx Interactive. Another graphics outfit, S3, broke up into pieces, one portion of which wound up in the hands of VIA Technologies, the Taiwanese chipmaker, while the other pieces became SonicBlue, a consumer electronics concern that before the age of the iPod was notable for acquiring the maker of the original Rio MP3 player. (I did say it was ancient history, didn’t I?)

Anyhow, Microsoft needed a hedge in case Nvidia failed to deliver the needed chip. As you can read above, the original terms called for Nvidia to pay back $100 million in cash, and the rest in equity, in the event that Nvidia failed to meet its commitment. Once it delivered and became a strategically important supplier, the deal terms changed to allow Microsoft the right of first refusal in the event that Nvidia was approached for an acquisition, or an investment stake of 30 percent or more.

Also at the time, it was still being prosecuted by the federal government for alleged violations of antitrust laws, making an attempt at an outright acquisition on Nvidia out of the question. In making a big bet on Nvidia’s technology, Microsoft would have wanted to ensure that the young company wasn’t vulnerable to an easy takeover by someone, say Sony, who might have endangered Microsoft’s supply of a critical component.

Fast forward to today. Before its $8.5 billion deal to acquire Skype, Microsoft had more than $50 billion in combined cash and short-term investments, and could, at least on paper, put up the $15 billion or so that would be required to acquire Nvidia if it came to that, which it won’t.

Why not? First off, any such deal wouldn’t likely pass muster with antitrust regulators. The U.S. Department of Justice and Federal Trade Commission might sign off on it, but does anyone believe that the hypersensitive European Commission would be so willing? With Nvidia mounting a reasonable challenge to Intel, it would seem to tighten an integration of hardware and software in one place (Apple notwithstanding). This is, after all, the same European Commission that set a record with the $1.45 billion fine it dealt Intel in 2009 just for playing super-tough against AMD. Forget it.

And if that’s not reason enough to doubt a potential takeover of Nividia by Microsoft, or anyone else for that matter, look at Nividia’s share price. The time for an acquirer to move on Nvidia was a little less than a year ago, when its shares were trading at less than $10 and the company had a market capitalization of less than $6 billion. Now trading at a valuation north of $11 billion, reporting decent profits and holding about $2.7 billion in cash as of May 1, Nvidia is doing just fine on its own. Though CEO Jen-Hsun Huang, who was interviewed by ATD’s own Ina Fried at D@CES earlier this year, probably looks back fondly on the $200 million he got from Microsoft 11 years ago.

So? Everyone chill out. There’s really nothing new to see here. Instead, listen to this great, aptly named John Lee Hooker tune, with Carlos Santana sitting in on guitar. It’s not new either. But it’s a lot more interesting.

Although we learned a bunch of things about Windows 8 on Wednesday, there is still a lot that we don’t know.

In an exclusive demo at D9, we did get a good look at the Windows 8 desktop as well as the guiding principles for the operating system as a whole. Microsoft showed an operating system that borrows much from Windows Phone 7 on the design side and aims to be equally at home on a tablet, desktop or laptop.

But there are many questions about Windows 8 that remain unanswered. Here are just a few key ones.

1. When will Windows 8 ship?

2. Where will competitors be by that time?

3. How well will these Windows 8 machines work when running a whole bunch of old programs?

There’s also the question of just how well–even when running on ARM-based chips–Windows 8 will do when it comes to characteristics like long battery life and instant boot-up that have been hallmarks of iOS and Android devices.

Also unclear is what else Microsoft has in store for Windows 8. In an interview, Steven Sinofsky stressed that this is a major release of Windows and there are a lot more changes being made throughout the operating system. Expect to learn a lot more about those at Microsoft’s mid-September developer conference in Anaheim, Calif.

The fundamental goal with the new operating system, which is being shown for the first time at D9, is to create something that is equally well at home on an 8-inch tablet as it is on a powerful desktop attached to a huge monitor.

“It’s ‘no compromise’ and that’s really important to us,” Windows President Steven Sinofsky said in an interview with AllThingsD.

At the heart of the new interface is a new start screen that draws heavily on the tile-based interface that Microsoft has used with Windows Phone 7. All of a user’s programs can be viewed as tiles and clicked on with the touch of a finger.

Windows 8 essentially supports two kinds of applications. One is the classic Windows application, which runs in a desktop very similar to the Windows 7 desktop.

The other type of application, which has to be written in HTML5 and Javascript, looks more like a mobile application, filling the full screen. Internet Explorer 10, which is part of Windows 8, has already been configured to run in this mode, as have several widget-like apps for checking stock prices and weather.

Although Microsoft didn’t offer any details, the start screen that it is showing on Wednesday includes a prominent link to a store, ostensibly confirming that Microsoft plans to get in the business of directly distributing Windows programs, much as Apple has on both the iPhone and Mac.

Sinofsky noted that there were a few things that the iPad showed were missing from Windows–most notably a touch-first interface and an app distribution mechanism and new business model for developers. Windows 8, as the product is currently code-named, is designed to address all three of those issues, while preserving compatibility with decades of existing Windows programs.

Although Windows 8 is clearly influenced by the iPad and other mobile devices, the plan for the new operating system has been in the works since Windows 7 shipped in July 2009–several months before the iPad was first shown.

“We really did take a step back after Windows 7,” Sinofsky said. “We were clearly influenced ourselves by phones.”

Microsoft has also done work with the classic Windows desktop to make it more touch friendly, including using a new kind of “fuzzy hit targeting” to adjust for the fact that fingers are far less precise than a mouse. The goal, says chief designer Julie Larson-Green, is that classic apps, though designed for a keyboard and mouse, work well with touch. Apps taking advantage of the new programming layer, she said, are designed for touch first, but also work well with a keyboard and mouse.

Windows is growing more flexible in other ways. Microsoft said back in January that the next version of Windows would support ARM-based chips from Nvidia, Texas Instruments and Qualcomm, in addition to the traditional Windows processors from Intel and AMD. Though Sinofsky and Green used Intel-based machines for Wednesday’s demo at D, Microsoft plans to demonstrate some of the ARM-based designs later today at the Computex trade show in Taiwan.

On a technical note, Sinofsky stressed that after decades of ever-increasing system requirements that characterized Windows releases through Vista, Microsoft is once again building an operating system that demands fewer resources than its predecessor–a trend started with Windows 7, which worked on all Vista-compatible systems.

A key question is how well this new Windows will stack up against a new generation of “post-PC” devices running Android, Apple’s iOS and other operating systems.

There are other unanswered questions as well, including just when Windows 8 will be ready. Sinofsky declined to say, but said Microsoft will have a lot more to say about Windows 8 at a developer conference in mid-September in Anaheim, Calif.

Chips based on ARM designs power Apple’s popular iPhone and iPad devices and devices that run Google’s Android software. Intel’s perceived momentum took another blow in January, when Microsoft said the next version of its mainstream Windows operating system will for the first time work on ARM chips as well as the x86 design sold by Intel and AMD.

Renee James, who runs Intel’s sizeable software efforts, took pains Tuesday to counter the perception that the forthcoming Windows 8 product is a problem for Intel.

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ARM’s performance mimics that of others in the semiconductor space, including STMicroelectronics, which Tuesday reported that first-quarter earnings nearly tripled from a year earlier. Intel and Apple have also posted strong numbers over the past week on the back of strong demand.

The FTSE 100 company, which is trading at 50 times its earnings, posted a 10 percent rise in first quarter net profit to £21.5 million on the back of a 26% increase in revenue to £116 million. It secured 39 processor licenses in the quarter ended March 31 after signing 35 processor licenses in the previous quarter.

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Today, however, was about the Atom chip, the other chip on which Intel has pinned such hopes yet seen little payoff as yet. The company announced that the latest version of the Atom, known till now under the codename Oak Trail, is available beginning today.

The new chip is about 60 percent smaller, meaning it consumes less power than its predecessor to get the same level of computing work accomplished. Intel says it will be capable of delivering “all day” battery life in tablets and allow for a fanless design in small notebook PCs, meaning those devices will be both cooler and quieter. Intel has also added a feature called Deeper Sleep that conserves power during periods of inactivity.

And as is often the case when Intel debuts a new chip, it also points toward the near horizon. In this case, it’s Cedar Trail, yet another version of the Atom, this one built with a bleeding-edge 32-nanometer manufacturing process, which means all the elements on the chip will be even smaller yet. Intel’s current line of PC processors, the Sandy Bridge generation, is built on the same manufacturing technology. Cedar Trail will not only be smaller, but also will sport such things as a media engine for video playback at full HD resolution of 1080p.

Tablets and smartphones to this point have been another sore spot for Intel, where chips built on the core designs of U.K.-based ARM Holdings tend to hold sway. Intel’s chips have so far suffered from a nagging need to sip precious battery power far less greedily as compared to designs of ARM-based chips from the likes of Broadcom, Qualcomm, Samsung and others.

The new chip will run on tablets running Google’s Chrome and Android operating systems; MeeGo, the smartphone platform that Intel has been working on with Nokia (though its future is in question since Nokia’s decision to embrace Windows); and Microsoft’s Windows.

Meanwhile, Intel still has a lock on the market for traditional PC and server chips, though as we all know, tablets–one in particular–have been causing all kinds of troubles for the players in that end of the market.

As usual, the idea behind the teardown is not only to figure out who Nintendo’s component suppliers are and what parts are being used, but to estimate how much all the components cost to help guess how much of a profit margin Nintendo is making on each unit. And it looks like a decent margin. ISuppli says the cost of all the parts in the device itself plus what’s in the box amount to $103.25 for a device that’s selling at retail for $249. The cost works out to an increase of about $25 over the Nintendo DSi, the most recent Nintendo handheld, released in 2009, which cost about $78, when iSuppli tore it apart that year.

While most of the components come from Japan, it’s not entirely clear if the supply of any of the parts used come from areas affected by the earthquake and tsunami, says Andrew Rassweiler, an iSuppli analyst who supervised the teardown. “Many of these component should have a greater risk exposure to supply chain problems, though we don’t know about any specific disruptions at this point,” he said.

The most expensive component, as is often the case with consumer electronics, is the displays. The 3DS uses two Sharp displays that cost a combined $33.80. The headliner is the top screen 3D. It’s a 3.5-inch 800-by-240 pixel display that uses an LCD-based parallax barrier panel sandwiched to the back of the color LCD which alternates between the left and right images at a high rate of speed to produce the 3D effect. “It looks like a conventional LCD from the outside, but when you open the display you see that on one side of the glass is essentially the conventional color element, and on the other side of the glass is a monochrome element,” Rassweiler told me. “It’s a clever bit of display engineering.”

The handheld’s main chip is an applications processor. It’s a custom ARM-based chip manufactured by Sharp, that at a cost of $10.02 is only slightly more expensive than the chip in the previous Nintendo DSi. However, Nintendo has quadrupled the amount of flash memory in the 3DS versus the DSi to 16 gigabytes, and Samsung, the world’s largest manufacturer of flash, supplied it. Fujitsu supplied another type of memory known as fast-cycle RAM. Rassweiler says for this particular type of memory, Nintendo has used a type of chip that’s only made by Fujitsu, which is odd because FCRAM is widely available, and its unusual for consumer electronics manufacturers to “single source”–that is, rely upon a single supplier for an important component. The combined cost of memory on the 3DS worked out to $8.36, more than twice the cost of the memory found on the DSi.

Three chips related to the user interface cost a combined $6.81: an accelerometer from STMicroelectroncis, a gyroscope from Invensense, and an audio chip from Texas Instruments. Atheros, the Wi-Fi chipmaker that’s being acquired by Qualcomm, supplied a $5 Wi-Fi chip. TI and NEC supplied power management chips that cost $3.63. The 3DS contains three cameras, and though it’s not clear who supplied them–camera suppliers have gone to great lengths to hide their identities in recent years–iSuppli reckons their combined cost at $4.70.

Since I often get asked this question, let me say that iSuppli’s analysis focuses strictly on the materials used and doesn’t account for the cost to develop software or to license any patents. Nor does it account for the cost of any shipping or distribution or marketing. It’s just the raw cost of the hardware.

The company has more ambitious goals for subsequent years, with plans to more than double performance in each of the next three years with chips code-named Wayne, Logan and Stark.

Nvidia’s current Tegra 2 chip is at the heart of many Android phones and a number of Android Honeycomb tablets, including the Motorola Xoom, LG G-Slate and the just-introduced Samsung Galaxy Tab 10.1.

However, Nvidia isn’t the only company ramping things up. Qualcomm announced a new series of ARM-based chips on Monday, though its quad-core chip isn’t slated to arrive until 2012.

For more on Nvidia’s plans for the future, check out the onstage interview I did with CEO Jen-Hsun Huang at our D@CES event in January.

]]> http://allthingsd.com/20110215/aiming-to-power-ever-more-powerful-graphics-nvidia-plans-quad-core-mobile-chip-this-year/feed/ 0 http://allthingsd.com/20110210/fans-of-new-chip-making-style-hope-to-step-out-soon/ http://allthingsd.com/20110210/fans-of-new-chip-making-style-hope-to-step-out-soon/#comments Thu, 10 Feb 2011 18:00:34 +0000 Don Clark http://voices.allthingsd.com/?p=36197 Manufacturers keep shrinking transistors and other tiny components on computer chips, to the point that some materials and processing techniques used for decades are no longer sufficient. Backers of one new approach believe they are positioned to make a difference.

An industry group that includes influential players like IBM and ARM Holdings on Thursday is talking up the progress of one particular production recipe. It is a variant of a technology called “silicon-on-insulator,” or SOI, which has been used by IBM and others such as Advanced Micro Devices to make chips that are mainly known for high performance.

The group, called the SOI Industry Consortium, says they now have data to back up a claim that the version called fully-depleted SOI can play a major role in a different sort of application altogether–portable, battery-powered devices where power consumption is paramount.

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]]> http://allthingsd.com/20110210/fans-of-new-chip-making-style-hope-to-step-out-soon/feed/ 0 http://allthingsd.com/20110127/still-strong-microsoft-beats-estimates-as-quarterly-sales-neared-20-billion/ http://allthingsd.com/20110127/still-strong-microsoft-beats-estimates-as-quarterly-sales-neared-20-billion/#comments Thu, 27 Jan 2011 21:07:40 +0000 Ina Fried http://mobilized.allthingsd.com/?p=3079

Microsoft on Thursday reported earnings and revenue that topped expectations and rose significantly from a year ago amid strong sales from its Xbox unit.

For the three months ended Dec. 31, Microsoft earned $6.63 billion, or 77 cents per share, on revenue of $19.95 billion. The per-share number is up from 74 cents a year ago and ahead of the analysts’ average prediction of about 68 cents per share.

“We are enthusiastic about the consumer response to our holiday lineup of products, including the launch of Kinect,” CFO Peter Klein said in a statement. “The 8 million units of Kinect sensors sold in just 60 days far exceeded our expectations,” said Peter Klein, chief financial officer at Microsoft. “The pace of business spending, combined with strong consumer demand, led to another quarter of operating margin expansion and solid earnings per share growth.”

Not only were the results ahead of estimates financially–they were also ahead of estimates chronologically, as the company accidentally released the information before the end of regular trading on Thursday. Results were expected to be released after the closing bell.

“A preproduction draft of our earnings release was discovered by one or more media sources who then published our results to the web before market close,” Microsoft said in a statement. “After consulting with NASDAQ, we have posted our official numbers. We apologize for any confusion and will review our procedures to ensure this does not happen again.”

With the results from the past quarter, Apple passed Microsoft slightly in quarterly revenue, but did not–as some analysts thought might happen–surpass Redmond in profits as well. The company also noted it bought back $5 billion in shares during the quarter and handed out $1.3 billion in dividends to shareholders.

The gaming unit wasn’t the only part of Microsoft going strong. Redmond said its Office unit also had a big quarter, growing 24 percent from a year earlier, and that Windows 7 license sales have now passed 300 million.

“Business demand for our productivity and infrastructure products and cloud solutions is strong,” COO Kevin Turner said in a statement. “Office had a huge quarter, exceeding everyone’s expectations, and our roadmap for cloud productivity with Office 365 makes products like SharePoint, Exchange, Lync and Dynamics CRM even more attractive to our customers.”

The company noted in a PowerPoint presentation accompanying its results that nine out of 10 businesses have now started their formal migration to Windows 7. Turner also pointed to Microsoft’s longer-term move to bring Windows to ARM-based processors.

“Windows 7 continues to be the fastest-growing operating system in history, and our recent system-on-a-chip announcement demonstrates our commitment that Windows will have the power and flexibility to run everywhere and on every device,” he said.

The company also said its online advertising sales were up 23 percent during the quarter.

However, Microsoft’s outlook was limited, offering guidance only for what it expects its operating expenses to be. In the PowerPoint, Microsoft offered a bit more information, detailing its unit-by-unit expectations relative to their markets. For example, the company said that Windows growth should roughly track the PC market, adjusting for some boost the company got a year ago from the launch of Windows 7. Server sales should also track the hardware market, with long-term licensing and services revenue growing in the high single digits for the current quarter and low double digits for the full fiscal year, which runs through the end of June. The company said the entertainment unit should enjoy year-over-year revenue growth of 50 percent for the current quarter and 40 percent for the full fiscal year.

Here’s a full look at the company’s segment-by-segment results (click to enlarge):

]]> http://allthingsd.com/20110127/still-strong-microsoft-beats-estimates-as-quarterly-sales-neared-20-billion/feed/ 0 http://allthingsd.com/20110127/game-changer-sony-uncrates-next-generation-portable/ http://allthingsd.com/20110127/game-changer-sony-uncrates-next-generation-portable/#comments Thu, 27 Jan 2011 15:03:32 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=56541 Sony stepped up its game in the mobile gaming market this morning by uncrating the Next Generation Portable, the successor to the dusty PSP. With a quad-core ARM Cortex-A9 processor and a multi-core PowerVR SGX543MP4 graphics chip, the device promises a PlayStation 3-level gaming experience further enhanced with front- and rear-facing cameras, a gyroscope, accelerometer, Wi-Fi and 3G support, and built-in GPS. It also boasts a five-inch, 960×544 OLED touchscreen and a corresponding touch panel on the rear of the unit.

It’s a radical redesign of the PlayStation Portable and an important one, as it must compete for gamers’ attention not just with Nintendo’s forthcoming 3DS but with gaming-capable smartphones like the iPhone.

“Times have changed, from an era where you had to carry around a dedicated gaming device like the PlayStation Portable to play games on-the-go,” Kaz Hirai, head of Sony’s gaming division said at a launch event today. “Now you can enjoy casual games on cellphones, smartphones, tablet PCs and many other multifunctional portable devices, and these casual gamers are growing rapidly in number….We can’t ignore this market.”

With that in mind, Sony is for the first time ever making PlayStation software titles playable on non-Sony devices. The first step toward that goal is PlayStation Suite, a new cross-platform software framework that will bring Sony titles to Android tablets and smartphones. “Easy-to-play games are becoming big business and this is recognition of that change in the market,” Hirai said. “Our mission is to make PlayStation quality games available on non-PSP devices.”

The NGP is expected at market before the end of the year. No word yet on price. Below, the NGP’s specs in full, as well as its first trailer.

]]> http://allthingsd.com/20110127/game-changer-sony-uncrates-next-generation-portable/feed/ 1 http://allthingsd.com/20110125/check-it-out-will-i-am-is-just-one-of-two-intel-pop-music-partners-video/ http://allthingsd.com/20110125/check-it-out-will-i-am-is-just-one-of-two-intel-pop-music-partners-video/#comments Wed, 26 Jan 2011 02:15:34 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=2295 Chipmaker Intel said today it has tapped Black Eyed Peas front man Will.i.am as its director of creative innovation. The announcement came at a press event in Anaheim, Calif.

Intel didn’t say much about what he’ll actually do. Intel’s statement on the partnership says he will “collaborate with Intel on many creative and technology endeavors across the ‘compute continuum,’ which reaches across traditional notebooks and into smart phones and tablets.” It’s on those last two where Intel has tended to struggle with market penetration, mainly because most device manufacturers favor chips built around the ARM architecture.

The company did reveal that he’s already working on music for Intel. He did say in an Intel press release that “nearly everything I do involves processors and computers, and when I see an Intel chip I think of all the creative minds involved that help to amplify my own creativity.”

Meanwhile, it’s not Intel’s only promotional endeavor in the world of pop music. The company teamed up with the Korean girl-group sensation Girls’ Generation, which our friends at The Wall Street Journal profiled last week. The video below is supposedly inspired by Intel’s “Visibly Smart” 2nd Generation Core processors, and, if nothing else, you can hear the word “core” throughout the lyrics. However it’s worth watching if only for the last few seconds, when the group does its take on the well-known Intel chime from its TV commercials.

]]> http://allthingsd.com/20110125/check-it-out-will-i-am-is-just-one-of-two-intel-pop-music-partners-video/feed/ 0 http://allthingsd.com/20110113/otellini-the-internet-is-really-big-good-news-for-intel/ http://allthingsd.com/20110113/otellini-the-internet-is-really-big-good-news-for-intel/#comments Fri, 14 Jan 2011 01:07:57 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=1767 Sales of PCs may be slowing down, and Intel may as yet be all but nowhere in the emerging market for smartphones and tablets, but that’s okay with Intel CEO Paul Otellini.

Despite the headwinds, Intel delivered on its quarterly results. Profits were up 48 percent year-over-year, and Intel set all-time records in sales and profits both for the quarter and the full year.

As he pointed out in his prepared remarks in today’s quarterly earnings conference call, sales at Intel’s Data Center Group grew by 15 percent in the fourth quarter and finished 2010 up 35 percent. What’s driving such healthy growth? The Internet, of course. Its growth is causing a mushrooming demand for servers of all kinds, which means demand for Intel server chips is going up right along with it.

Traffic on the Internet was 245 exabytes in 2010, he said–greater than all previous years combined, and within five years another billion people getting online will push that to over 1,000 exabytes a year.

(What’s an exabyte? 1,024 petabytes. What’s beyond the exabyte? The zettabyte. Incidentally, Royal Pingdom released some interesting numbers about the size and scope of the Internet today, and they’re worth reading.)

Hear the snippet from Otellini’s remarks below.

Later, in response to a question from Patrick Wang of Wedbush Securities, Otellini talked about where enterprises are in their PC refresh cycle, one of the few bright spots for PC sales that Gartner and IDC mentioned in their sales estimates yesterday. Reiterating an earlier comment that he expects PC sales to grow at a rate in the “low to mid-teens” in 2011, Otellini said he thinks many corporations haven’t yet updated to using Microsoft’s Windows 7, and so the upgrade cycle hasn’t yet, in his view, reached its midpoint. Then Intel CFO Stacy Smith jumped in with some comments about where cloud computing figures into sales of server chips. Another two-minute audio highlight is below.

Also asked during the call by Shawn Webster of Macquarie Research about Microsoft’s announcement that it will create a version of Windows for ARM-based chips from Qualcomm, Texas Instruments and Nvidia, Otellini said it didn’t seem to him like “new news,” and that versions of Windows for chip architectures other than Intel’s x86 family have been around before. In this 90-second audio clip he talks about the potential pluses and minuses of Microsoft’s move for Intel.

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