Michael Dell put his company in play in his bid to take it private. But with rival bidders now stepping forward, he runs the risk of losing control of the company that bears his name, according to a story in the Wall Street Journal.

The Blackstone Group and activist investor Carl Icahn have expressed interest in making a bid for the Round Rock, Texas-based computer maker.Their bid will reportedly top $15 a share.

Dell himself has partnered with Silver Lake Partners to buy the existing shares of the publicly traded company and take it private at $13.65 a share, or $24.4 billion. Shareholders have complained that the price of Michael Dell’s bid is too low.

Michael Dell owns 14 percent of the company he founded as a mail-order PC company in 1984 in his dorm room. The Silver Lake buyout would give Michael Dell majority control and the ability to call the shots as he sees them to revive the company. But if Blackstone and Icahn win, then Michael Dell may be sidelined, the Journal said. Dell declined comment.

Dell’s plan includes spending more money on acquisitions, internal development of corporate software and services, investing in hardware products, and hiring more sales people.

Apple is reportedly gearing up to move the production lines of its Mac Mini computer to the U.S., along with its manufacturing partner Foxconn, according to Digitimes.

While Digitimes has had a rocky history with Apple rumors (mainly because it reports every single thing it hears), this news makes a lot of sense. Mac Mini shipments are on the rise, after climbing more than 40 percent this year to around 1.4 million units. It’s also quickly becoming a powerful little device: This year’s Mac Mini upgrade includes an option for a fast quad-core Intel Core i7 processor running at 2.3 gigahertz.

Apple announced earlier this month that it will spend more than $100 million to bring some Mac production back to the U.S. next year, but it didn’t specify which models would get the special treatment. Previous speculation pointed to the Mac Pro, Apple’s massive desktop, though that model hasn’t received a major design upgrade in some time (and it’s been overshadowed for years by innovations in Apple’s iMac and MacBook lines). It makes more sense for Apple to focus on a device that’s on the rise for its triumphant U.S. return instead of one that’s on the decline.

Digitimes notes that Mac Mini shipments are expected to rise another 30 percent in 2013 to 1.8 million.

While desktops are falling out of fashion, an inexpensive and tiny computer like the Mac Mini could end up being a worthy alternative for many. It’s already packing a fast processor — now all Apple needs to do is give it better graphics capabilities to satisfy gamers and media professionals.

Working with DonorsChoose.org, a charity that helps support public education in the U.S., Google is offering its Samsung Series 5 Chromeboooks — a $429 device with management and support — for just $99. And if you play your cards right, that price could be zero.

The catch?

You have to be a full-time public school teacher in the U.S., and you have to set up a DonorsChoose.org account, where you’ll fill out a brief request form. Once that’s complete, an account will be set up on Donor’s Choose, and anyone can come to the site to make a donation. When your funding goal is complete, the Chromebooks will be sent.

A campaign for Chromebooks on DonorsChoose.org

I checked the contest rules, and there’s nothing that says educators can’t effectively purchase Chromebooks for $99 just by donating to their own funding campaign. A Google representative did confirm with me, however, that schools cannot buy directly from Google and must use DonorsChoose.org.

One other detail the Google rep added: a maximum limit of 30 Chromebooks. So schools won’t be able to outfit all their classrooms with this strategy … unless they get creative and run a separate campaign for each class.

The Samsung Series 5 Chromebook is a 12.1″, 3-pound notebook with a 1.66Ghz Intel dual-core Atom CPU. It’s got WiFi and optional 3G, a 4-in-1 memory card slot, and a built-in webcam. The standard model comes with 2GB of RAM and a 16GB SSD disk. Most importantly for schools, it offers up to 8.5 hours of battery life.

More than a thousand schools are already using Chromebooks in classrooms, Google said.

There is currently only one project up on DonorsChoose, although more will probably join quickly at this price.

One downside: School budgets are not the most flexible things in the world. In fact, the opposite may be true. Here’s hoping that at least some schools have some budget space to take advantage of this fantastic offer. Or, that benefactors on DonorsChoose.org will be very, very generous.

Now if only Google would offer the same deal to non-education customers …

While the $35 Raspberry Pi computer gets a lot of kudos for being a cheap way to get into hardware hacks, Texas Instruments’ $13 Stellaris LaunchPad could soon steal the spotlight.

The LaunchPad is an ARM-based single-board kit that will let you tinker with hardware and coding at an incredibly low price. Even if you’re an amateur hacker, there’s nothing wrong with trying this out because it’s only 13 freaking dollars.

Check out the Stellaris LaunchPad’s specs:

The evaluation LaunchPad board comes with a USB cable. For software, documentation, and more, simply check out Texas Instruments’ Wiki to get started.

For more on Stellaris LaunchPad, check out the video below:

PC optimization software Soluto helps over three million people in 182 countries get more out of their PCs. Along the way, the company learns a lot about what people do … and how their software works. Fortunately for us, the company shared that data a couple of days ago.

Here are some of the highlights:

European nations such as Hungary and Portugal are adopting Windows 8 quickly, with almost 9 percent adoption in Hungary and 5.29 percent in Portugal. China is also moving quickly, with more than seven percent of Windows users already on Microsoft’s new operating system. Americans, however, are adopting more of wait and see approach, with only 3.4 percent of Windows users updating.

In addition, with the touch-friendliness of Microsoft’s new operating system, Windows 8 is penetrating the tablet market much more effectively than Windows 7. For example, while less than two percent of Windows 7 machines are tablets, almost five percent of Windows 8 machines are, in fact, tablet computers — before Surface has really had a chance to make an impact yet.

Not actually a Windows 8 install disc

Interestingly, desktop use is also slightly higher, with almost 51 percent of Windows 8 installs being on a desktop PC, versus 48.5 percent of Windows 7 installs being on a laptop.

Some apps, Soluto found, crash less frequently on Windows 8.

That includes Google Drive, which is the most common app crash culprit on Windows 7, crashing for almost a third of all users (I guess companies can be great at everything). In Windows 8, however, Google Drive crashes for only one percent of users. TuneUp Utilities is another in the much-improved category, moving from crashing for 20 percent of its users on Windows 7 to five percent on Windows 8.

Some apps, of course, crash more on Windows 8. Facebook Video Calling, for instance, crashes at least once a month for a rather unlucky 13 percent of its users, compared to just one percent on Windows 7. And Apple’s iTunes software, often maligned for being bloated, crashes almost twice as much on Window 8.

Soluto also tracks PC brands that users have purchase. The top PC brands being used by Windows 8 early adopters are HP and Dell, with most than 30 percent of the market, followed in fourth and fifth spot by Asus and Acer:

1. 16.83% – HP
2. 14.65% – Dell
3. 10.71% – Gigabyte
4. 10.32% – Asus
5. 8.72% – Acer

One thing about crashing apps: Third-party developers don’t have a lock on them. Microsoft’s own Internet Explorer still crashes about the same amount on Windows 8 as it always has.

photo credit: gynti_46 via photopin cc, Robert Couse-Baker via photopin cc

The delightfully simple and surprisingly powerful Raspberry Pi computer has upgraded its Model B machine and kept the price at a stunning $35.

The Raspberry Pi project, run by the non-profit Raspberry Pi Foundation, started shipping its first orders in April and then shipped in volume in July. The credit-card computer runs the Linux OS and includes a 700-MHz processor and ports for Ethernet, HDMI, USB, and audio — enough oomph to play Quake 3.

Now the more powerful Pi Model B gets even better, with double the RAM at no extra cost. The upgrade makes the machine more versatile and could enable it to run apps simultaneously.

“One of the most common suggestions we’ve heard since launch is that we should produce a more expensive “Model C” version of Raspberry Pi with extra RAM,” Raspberry Pi foundation trustee Eben Upton said in a blog post. “This would be useful for people who want to use the Pi as a general-purpose computer, with multiple large applications running concurrently, and would enable some interesting embedded use cases (particularly using Java), which are slightly too heavyweight to fit comfortably in 256MB.”

If you’d like to order a Raspberry Pi, you can do so from RS Components or element14.

Check out Upton’s blog post below for more:

One of the most common suggestions we’ve heard since launch is that we should produce a more expensive “Model C” version of Raspberry Pi with extra RAM. This would be useful for people who want to use the Pi as a general-purpose computer, with multiple large applications running concurrently, and would enable some interesting embedded use cases (particularly using Java) which are slightly too heavyweight to fit comfortably in 256MB.

The downside of this suggestion for us is that we’re very attached to $35 as our highest price point. With this in mind, we’re pleased to announce that from today all Model B Raspberry Pis will ship with 512MB of RAM as standard. If you have an outstanding order with either distributor, you will receive the upgraded device in place of the 256MB version you ordered. Units should start arriving in customers’ hands today, and we will be making a firmware upgrade available in the next couple of days to enable access to the additional memory.

I’d like to thank our partners, RS Components and element14/Premier Farnell, and the suppliers, particularly Samsung, Sony and Broadcom, for all their help in delivering a smooth transition to the 512MB. I’m looking forward to seeing what you all get up to with your shiny new Pis.

Raspberry Pi photo via Cesar Cardoso/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Microsoft released the final build of Windows 8, dubbed “RTM,” to developers and manufacturers last week. So how will it work on your desktop when it lands on Oct. 26?

Based on my tests, not very well. In fact, if you’re still using a desktop PC, you’re probably going to dislike Windows 8.

Microsoft has designed Windows 8 to work across almost all devices, with the exception of smartphones, a nearly one-size-fits-all approach to the operating system. That’s a marked contrast to Apple’s decision to use iOS for tablets and phones, and OS X on desktops.

On top of this, Windows 8 will share a kernel with Windows Phone 8 to make it easier for developers to create apps and games that work for both.

Unfortunately, Windows 8 doesn’t work equally well for all devices. How I work on a desktop is going to be different from how I work on a tablet. Using my fingers to navigate through Windows is a wholly different experience than using a mouse to click on things.

With Windows 8, Microsoft favors tablets, touchscreens, and laptops with modern touchpads. It works very well for these kinds of computers. Traditional desktops with a keyboard and mouse, on the other hand, have been left in the dust.

Desktop issues

True, a major part of the OS is devoted to the traditional Windows desktop. The desktop view is there if you need to run older Windows applications, or if you just want a familiar-looking interface.

But the desktop view isn’t what Microsoft is pushing. Much like Apple’s Mac App Store, there will be a Windows 8 Store available for downloading the new full-screen apps Microsoft is betting heavily on. (Notably, the store won’t offer older Windows programs at all.) These new Windows 8-style apps appear on your computer’s Start screen and run in a full-screen mode without menu bars or toolbars. Microsoft has referred to its Windows Phone and Windows 8 interfaces as “Metro”, but it has ditched the term and not yet given us a replacement, so I’ll refer to it as the “modern” design. Indeed, much of the focus for Windows 8 is on the sleek Start screen (image above).

Now let’s dig into some of desktop issues. (Let us know what other issues you see for the desktop in the comments.)

Dead mouse — Windows 8 isn’t meant for mice — it’s meant for fingers. The spread-out Start screen is more ideal for tapping than clicking, whereas the Start menu in Windows 7 is crammed into a tighter space to make it easier to click individual items. Scrolling using your mouse now moves the screen left and right instead of up and down. Mouse scrolling can be problematic inside some modern apps. Parts of the Bing Weather app, for example, are meant to be scrolled up and down and can interrupt you. (Check out this video for an illustration of this problem.) Basically, scrolling through apps with your fingers is much easier.

Right-clicking — When you right click your mouse in Windows 7, a menu pops up next to where you clicked to give you more options. Right clicking a picture, for example, brings up options like Preview, Cut, Copy, or Delete. Right-clicking a program on the desktop Taskbar gives you lots of helpful options too. But right-click menus go out the window in Windows 8, unless you’re using an old-style desktop app. Now, instead of a menu of options appearing right where you clicked, a limited number of options appear at the bottom of the screen. You now need to move your mouse to the bottom of the screen to select an option, and this gets incredibly tedious in modern apps and on the Start screen.

Small displays — The modern-style Start screen and modern apps look great on tablet screens and small displays, but they can get a little messy on a desktop PC with a large monitor. Modern apps aren’t optimized for larger resolutions, although Microsoft makes it possible to scale apps. Microsoft is preparing Windows 8 for the world where 10- to 13-inch monitors are the norm, as ZDNet points out. Thankfully, Windows 8 at least includes decent multi-monitor support for power desktop users with two monitors.

Full-screen apps — Windows 8 already has some killer apps. Unfortunately, these apps are almost all better suited for tablets than desktops. There’s no “X” in the corner to exit apps in a single click like you can in Windows 7. Instead you have to click the very top of an app and drag it to the bottom of a screen to close it — an easy gesture on a touchscreen, but a laborious exercise with a mouse. It’s also not as easy to switch between these modern apps as it was with old-style desktop apps and the Windows 7 Taskbar.

Modern app switching — To switch between open modern apps using a mouse, you need to hover in the top left corner and then drag down to see the programs on the full left side of the screen. Only modern apps are shown in this lineup of open apps, not desktop apps. So if you want to switch between a modern app and an older desktop app, you need to go into the desktop and then select the desktop app you want. A two-step process has replaced the old one-step switch.

Screen splitting — Another issue with modern apps is the space allocated to them on the screen. When I work, I often divide my screen in two equal-sized windows. Modern apps don’t do this. You can only allocate roughly 25 percent of the screen to one app while the other 75 percent is taken up by another. This layout is not conducive to multitasking. Thankfully, you can still do a 50-50 split, or whatever tiling you’re used to, in the desktop area.

Hidden apps — It can be hard to find programs meant for the old-style Windows desktop if you don’t know where to go. From the desktop screen, you cannot launch desktop apps that aren’t already pinned to the Taskbar. That’s because the Start button is gone. Let’s say you use the Calculator app often. To access it, you have to go to the Start screen, right-click the screen, go to the bottom right-hand corner and select All Apps, then select Calculator. Once Calculator is open on the Desktop, you need to pin it to the Taskbar or you have to go through all of those steps again the next time you want it.

Internet Explorer tabs — This last point is minor, but the modern version of Internet Explorer 10 has no visible tabs. If you want to switch between tabs, you have to right click inside Internet Explorer to reveal your open tabs. I rely heavily on tabs to get my work done, so if you need them like I do, you’ll have to use old-style Internet Explorer from the desktop. While I don’t use Internet Explorer, it’s what comes available out of the box and many folks still use it. Alternately, you can download and use Google Chrome, which includes tabs in its modern app.

Tablet and touchscreen benefits

In its current form, Windows 8 is a tablet-centric OS. The interface works best on tablets, and we can’t wait to see it running on devices like the Microsoft Surface.

Windows 7 and Windows 8 are different beasts, and workflow is different when you have to deal with the Start screen versus the Start button. In Windows 7, I can do everything I can think of from a single screen. I can launch apps from the Taskbar or the Start button, I can easily re-size all my apps in different windows as needed, and everything feels optimized for an external mouse and keyboard.

Windows 8 requires me to switch between the desktop and the Start screen, which feels unnecessary. It shouldn’t take me extra steps if I choose to use a mouse, and that leads me to believe that Microsoft wants us to use tablets or ultrabooks instead of desktops. It also wants us to use full-screen modern apps instead of windowed desktop apps. (One exception: Microsoft Office 2013, which you launch from the Desktop but is more touch-friendly than past versions.)

The problems listed above show Microsoft is willing to alienate desktop users in favor of an interface that embraces touch screens and trackpads. Many businesses still rely on desktops for their workers, and it’s plausible that Windows 7 will remain the top choice for those businesses. That said, companies could adopt Windows 8 for tablets and hybrid laptops they want to deploy to workers.

After spending much time with Windows 8, I can’t recommend it for advanced desktop users unless Microsoft makes interface tweaks to make it more desktop-friendly. I don’t plan to upgrade my desktop from Windows 7 to 8 at launch because Windows 7 works so well. After several years of usage, I consider Windows 7 the best desktop OS ever, and I prefer it to Apple’s also-great Mountain Lion OS.

I expect Windows 7, with its 630 million licenses sold, will remain an incredibly popular OS for the next 10 years — just like Windows XP.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

It was only a matter of time before Microsoft’s hardware partners began publicly criticizing the Surface tablet, Microsoft’s first stab at building its own computing hardware.

Acer CEO JT Wang is the first PC maker head to voice his displeasure about the Surface, in an interview with the Financial Times yesterday.

“We have said [to Microsoft] think it over,” Wang told the Financial Times. “Think twice. It will create a huge negative impact for the ecosystem, and other brands may take a negative reaction. It is not something you are good at so please think twice.”

Reading between the lines, the true meaning of Wang’s comments is hard to ignore: He’s terrified of the Surface, because it may just prove that Microsoft doesn’t need to rely on fourth-tier manufacturers like Acer. The sentiment isn’t surprising, after all Microsoft basically betrayed its longstanding arrangement with PC makers by announcing the Surface so close to the launch of Windows 8. With the Surface, Microsoft is getting most of the spotlight with Windows 8 computers, instead of its hardware partners.

Campbell Kan, Acer’s personal computing president, also mentioned to the Financial Times that Acer may have to look at alternative software now that Microsoft is in the hardware game. (Of course Acer has no choice, unless it wants to bet the entire company on Linux.)

Last month, we also saw comments from Acer vice president Oliver Ahrens predicting that the Surface will fail. At this point, Acer isn’t even trying to hide that it’s quaking in its boots over the impending Surface launch.

And the company has good reason to be afraid: When was the last time Acer has made a truly compelling device? Acer may be the fourth-largest PC maker in the world (by shipments), but a stroll through Best Buy will show you that it got there by building cheap, low-quality machines. If Microsoft can deliver the Surface at a low price, Acer can kiss much of its business goodbye.

Photo James Pikover/VentureBeat

What happens to all those corporate computers that get turfed every three years? Or yesterday’s gadgets that are piled high in your spare closet? If you’re green — and community-minded — there are some good programs for others to re-use your electronics, which reduces landfill waste and helps your neighbor.

Studies have shown that PCs kept longer than three or four years can actually be counterproductive for businesses from a financial standpoint. The extra cost of virus protection and loss of service due to breakdowns can outweigh the financial benefits of not buying a new computer.

And all the shiny new gadgets we buy and love? They often lose our affection within six to 18 months as shinier, newer gadgets are released. The new doodads are faster, smaller, with more storage, better cameras … and we want the latest and greatest.

But that’s not a reason to trash the old-but-good stuff. Or to let it die a slow, dusty, electronic death in a closet. A good alternative to dumping or hoarding is donation.

And there are a lot of options …

One is Reconnect, a partnership between Dell and Goodwill. Reconnect takes just about any kind of computer or gadget, and they’ll re-use what’s appropriate, and recycle what has no useful lifespan left. Contact your local Goodwill to see what they accept, but chances are they’ll take what you have.

For computers that have a good amount of commercial value left, consider eBay Giving Works, which is eBay for charity. You get to sell your old stuff on eBay, giving your gadgets a new home with someone who can use them, and donate the proceeds to charity. eBay allows you to donate between 10-100 percent of the selling price to charity … and will reduce selling fees by exactly the percentage you’re donating to charity.

Freecycle is another option for electronics — or anything you’re looking to de-clutter out of your home. It’s a nonprofit movement for giving unwanted items to people in your own community. Check the search engine to find groups near you who will accept your old gear.

Companies that wish to help others while responsibly replacing older technology would do well to follow the JPMorgan Chase model. JPMorgan has partnered with Good360 to donated refurbished technology to nonprofits and schools, supporting Good360′s mission is to help nonprofits with non-cash donations.

JPMorgan Chase has committed to providing 3,000 PCs over the next year alone, all of which will get new hard drives (good security practice and good for the new owners). And since 2009, the company has redeployed about 75,000 desktops, laptops, monitors, and printers.

That’s good for the environment, and good for those who are not as financially fortunate as others.

Image credit: Lasse Kristensen/ShutterStock

Mark your calendars folks, Microsoft’s Windows head Steven Sinofsky just announced that Windows 8 will officially be available on October 26th, 2012.

Sinofsky made the announcement at Microsoft’s annual sales meeting today. Microsoft previously hinted that Windows 8 would be released in late October, but it’s good to finally have specifics.

Current Windows users will be able to upgrade to Windows 8 for just $40 with a digital download, or $70 in a boxed update available in stores. In a sign that Microsoft is aiming for clarity with Windows 8, it’s rumored that Microsoft is dropping the confusing “full retail” box version of the OS.

If you can’t tell by our extensive Windows 8 coverage, we’re excited to see where Microsoft goes with Windows 8. It’s obvious that Microsoft is trying to make up for lost ground by making the OS tablet-ready, but the more we see from Windows 8, and the more we hear about Microsoft’s Surface tablet (check out our extensive hands-on), it seems that Microsoft is attempting a longer play with this OS than it has with past releases.

Windows 8 is a complete reinvention of Windows as we know it. And while that will certainly lead to lots of complaints from consumers who can’t find their Start button, it sets Microsoft up to rule the post-post PC era, where all of our computers may resemble the Surface more than they do traditional laptops today.

In recent Windows 8 news, Intel CEO Paul Otellini said there are currently 20 Windows 8 tablets in the works, and we reported on how common sense (imagine that) is the key to Microsoft’s Windows 8 keyboard design.

Photo: Devindra Hardawar/VentureBeat

Motorola Solutions has agreed to acquire British rugged-computer-maker Psion for $200 million in cash, the two companies announced Friday morning.

Motorola will pay $1.36 (88 pence) per share, which is a generous premium of 45 percent over Psion’s closing price of 60.5 pence on Thursday.

London-based Psion has been making rugged mobile PCs and accessories since 1980, and Motorola will use its expertise to expand its own handhelds and in-vehicle offerings. Mind you, this is a different Motorola from Motorola Mobility, which was acquired by Google, so don’t expect Psion to influence the next Google-Motorola smartphones. Psion has more than 800 employees and generated about $270 million in revenue in 2011.

“Psion is a compelling opportunity to strengthen our industry-leading, mobile-computing portfolio with ruggedized handheld products and vehicle-mount terminals that will deepen our presence in the global markets in which we compete,” said Greg Brown, CEO of Motorola Solutions, in a statement.

Psion mobile PC photo: Christopher Cornelius/Flickr

Dell unveiled a new line of Inspiron laptops today for back-to-school purchases. The models use some of Intel’s newest family of Ivy Bridge processors, which combine a microprocessor and graphics on a single chip.

The new models include the Inspiron 14z, a thin and light versatile laptop for people on the go.

Dell also has a special edition laptop for remium multimedia performance. The company has three versions of Inspiron laptops. They include a Z series for thin and powerful style on the go; the Inspiron R series for studio-quality multimedia and auido. All of the laptops will use Intel’s Ivy Bridge processors. They come with 13-inch or 14-inch screens, and they have MaxxAudio technology.

“As families prepare to send their kids off to school this fall, they need a laptop with reliability and performance,” said Sam Burd, vice president and general manager of product development for Dell. “The expanded and redesigned Inspiron family helps parents embrace technology and make a smart investment in their childrens’ success.”

Pricing and availability is as follows:
Inspiron 14z: Available today in select countries in Asia, June 19 in the U.S. and Canada, and in select countries in Europe and Latin America later this summer, starting at $699.99 USD.
Inspiron 13z: Available today in select countries in Asia, and June 19 in the U.S. and Canada, starting at $599.99 USD.
Inspiron 15R: Available today in select countries in Europe and Asia, and June 19 in the U.S. and Canada, starting at $549.99 USD.
Inspiron 17R: Available today in select countries in Europe, and June 19 in the U.S. and Canada, starting at $599.99 USD.
Inspiron 15R Special Edition: Available today in select countries in Europe, Asia and Latin America, and June 19 in the U.S. and Canada, starting at $899.99 USD.
Inspiron 17R Special Edition: Available today in select countries in Europe and Asia, and June 19 in the U.S. and Canada, starting at $1,099.99 USD ($1,299.99 with 3D).

After the Raspberry Pi’s pre-order launch through two resellers caused temporary website crashes, VentureBeat caught up with Eben Upton, Director of the Raspberry Pi Foundation. He is thrilled that “demand has been absolutely enormous.”

The Pi is available internationally through outlets Premier Farnell and RS Components. There are no plans to increase the number of distributors for the foreseeable future as “these companies are in a position to build a very large number of devices,” adds Upton. He believes that the backlog of “many, many tens of thousands” orders will be addressed by late April.

That’s a lot of excitement for a new hardware platform from a non-profit organization. The Raspberry Pi Foundation is a UK registered charity that wants to foster programming skills among students and promote the study of computer science.

Eben Upton clarifies: “Remember that our priority goal isn’t to build computers. Our priority goal is to encourage people to learn to program. Building computers is like a side effect. We have to do it because we don’t believe there’s a good platform for teaching available. It’s a necessary step — and a good source of money to help us to achieve that goal.”

Upton assures us that North Americans ordering a Raspberry Pi don’t have to feel bad about taking something away from British school children. “To be honest, I think our first orders will mostly go to middle-aged guys, because these are the people who already know about computers and are in a position to make use of what is currently a very bare-bones platform.” Upton is counting on “the hackers” to support the new platform with software that will help the Pi become a good classroom product.

Both Raspberry Pi models are equipped with 256MB RAM, an 700MHz ARM processor and a VideoCore IV GPU capable of Blu-ray quality (1080p) video playback. The hardware architecture is not too different from smartphones, which should help software developers: “It has a lot of graphical performance. It is a really good platform to port iOS or Android apps onto,” says Upton. “We already have some early developers out there who have taken apps from a mobile device [to the Raspberry Pi], and found it performs very well.” So does the Foundation have any plans for an app platform? “That’s an interesting question. I think we would like to do something in that area, but we haven’t had a chance to do it.”

Regarding additions to the product portfolio, Upton responded, “I have no comment about future products. Read into that what you will”.  And even if the Raspberry grows into a big computer brand, he doesn’t envision the charity turning into a regular corporation: “It’s nice to be free of the pressure that comes with running a commercially funded startup. There’s always pressure to do things because they make money rather than they’re the right things to do. [The Raspberry Pi Foundation] will make money, but that money goes back into supporting what our primary goals are.”

In his day job Eben Upton is a technical director at semiconductor company Broadcom. His employer is very supportive: “Broadcom has a long track record of supporting initiatives in science, technology and engineering education. So it’s a good alignment between what Broadcom likes and what the [Raspberry Pi] Foundation is trying to do.”

Broadcom also supplies the BCM2835 system on a chip for the Raspberry Pi boards. Although the non-profit status makes it easier for the Foundation to negotiate discounts with parts suppliers, Upton emphasizes that his employer is not cutting Raspberry a sweetheart deal: “Broadcom is making money. All of the components are purchased on commercial terms, we’re not subsidized.”

This also means that the Foundation is not receiving any money from the British government, though it has been cultivating a fanbase in high places: “Senior levels of government in the UK are aware of what we’re doing and I understand that they are very enthusiastic about it. Education secretary [Michael Grove] in the UK is a fan, he mentions us a lot. My understanding is that George Osborne, the Chancellor of the Exchequer, is also aware of what we’re working on. So we certainly have a certain amount of passive support,” says Upton.

We couldn’t help asking Eben Upton whether fellow Foundation trustee David Braben is secretly working on a Raspberry Pi version of his landmark space game Elite. “I see him maybe every few weeks at trustee meetings and haven’t had a chance to ask him whether he would be interested in doing that,” replied Upton, “He’s like a local hero [in Cambridge], we’re very lucky to have him involved. We were extremely pleased when he agreed to join the trustee board; he’s obviously an extremely well-connected guy. He can add a lot of value to the project even without writing a version of Elite.”

[Photo credits: Raspberry Pi]

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Many have speculated that we’ve crossed the chasm to the Post-PC era, and that the PC as we know it will be relegated to niche-market status. While it is true that many more smartphones are sold each year than PCs, and that tablets are increasing market share rapidly, I believe business users and many consumers are still not in a post-PC era.

Instead, I think PCs will transform and meet mobile technology in the middle. This is especially true of notebooks, which make up the majority of PCs. But can notebooks compete with tablets?

Today’s tablet (e.g., Apple’s iPad, Android-powered devices from Samsung, Motorola, and RIM’s PlayBook) has much more processing power (CPU and graphics) than PCs of just two or three years ago. But tablets are not good at everything. Current generation devices are primarily for information and media consumption, but highly portable and easy to use. PCs, on the other hand, are great information- and content-creation devices, but much less portable and more complicated to interact with.

Over the next one to two years, this level of complexity will be reduced (as it has with the Windows 8 Metro interface), the usability will increase (more touch interfaces) and the portability of design (small like Intel’s Ultrabooks) will move towards the newer user-paradigms. This model has been pioneered by Apple’s MacBook Air, but Apple’s market share of notebooks won’t threaten the traditional Windows-based PC market in any substantial way.

What do I expect to take place over the next couple of years? Intel, Microsoft and the notebook vendors are not standing idly by; they are substantially morphing the traditional notebook to meet the challenge from by mobile devices. Upcoming hybrid designs will gain user acceptance by having today’s notebook features, coupled with the low power, ease of use, and long battery life of tablets and smartphones. Low power mainline chips from Intel (<15W) and others will give notebook vendors the freedom to move away from the current high-powered (low battery life) designs.

Windows 8 will allow enough flexibility to change the end-user experience while maintaining backwards compatibility with existing productivity and corporate apps. ARM-based notebooks running Windows 8 will help push the envelope. However ARM-based Windows systems will not be fully backwards compatible with existing apps, and I do not believe ARM will offer enough significant benefit over traditional Intel (or potentially AMD) based systems to garner more than 10 percent to 15 percent market share within the next two to three years.

The new notebook form-factors will have an impact on tablet market-share, especially in business markets where tablets offer some unique challenges for enterprises.

• Although popular with end users, tablets generally do not offer a significant ROI for enterprises except in certain well-defined areas.
• Tablets won’t replace more than 10 percent to 15 percent of enterprise laptops within the next two or three years. Most tablets will be supplemental, rather than replacement, raising over cost.
• Although iPads will continue to dominate short-term, by 2013-2014 Android tablets to acquire a majority share of the market including in the enterprise where specialized features will be added.
• A variety of screen sizes, price points and capabilities will expand the choices and enable more application scenarios. However, TCO for tablets will remain high, and on-board security will remain a concern for the next two to three years.

Organizations will need to adopt a “best use” strategy when evaluating the upcoming new form factors, and weigh not only market pressures and user desires, but also look at productivity and usage models that align with enterprise needs. In this regard, the new breed of hybrid notebook devices will effectively compete with tablets in many corporate scenarios and displace some current tablet deployments.

While initial cost of the new devices may be high, I expect prices to fall rapidly, and the overall ROI for these notebooks will exceed that of tablets for many users. So, bottom line, we are not in a post-PC era, yet.

Jack Gold is the founder and principal analyst at J.Gold Associates, an information technology analyst firm based in Northborough, Mass., covering the many aspects of business and consumer computing and emerging technologies.

VentureBeat is holding its second annual Mobile Summit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of the mobile industry. You can find out more at our Mobile Summit site.

Future computer image via ShutterStock

The first Raspberry Pi computer, which costs just $35, became available for pre-order earlier today and within hours, most outlets taking orders have sold out.

The first Raspberry Pi machine was first seen by us last May and at the time it was the size of a flash drive, but was still able to run the Linux open-source OS with its 700-MHz ARM processor and 128MB of RAM. Since that time, the tiny PC has gotten larger in size and now has two versions — the $25 Model A and $35 Model B. However, only the Model B went on pre-order today, while the Model A is heading into production in the next few weeks.

The $35 Model B is about the size of a credit card, measuring 85.6mm x 53.98mm x 17mm. It features a Broadcom 700-MHz ARM11 processor, 256MB of RAM, Ethernet port, HDMI port, USB 2.0 port, 3.5mm audio jack, and runs Linux operating system off an SD card. Impressively, the little guy can play 1080p HD video and run Quake 3 Arena.

Orders for the model B were taken through Premier Farnell and RS Components, but those sites have since changed pre-order forms to just forms letting the companies know you’re interested in the product. Raspberry Pi’s Twitter account reported earlier that Farrell has likely sold out.

The Raspberry Pi is the brainchild of engineer Eben Upton and British programmer David Braben. Somewhat similar to the One Laptop Per Child project, Upton and Braben’s goal is to manufacture a computer that is so inexpensive that every student can be given one.

Will you be buying a Raspberry Pi computer?

Apple’s Mac computers have hit the 5 percent mark in worldwide market share for the first time in 15 years, according to an All Things D report.

The Windows OS has been the most pervasive and popular operating system around the world for two decades, but because Apple is sole manufacturer of Macs and every non-Apple computer manufacturer makes PCs, Macs have seemingly always been slim in complete market share. What’s interesting now is that Macs are growing at a much faster rate than PCs overall and gaining traction by slowly picking up market share. In 2004, Macs had about 2 percent of market share worldwide but as of last quarter, Macs command 5 percent of the market, according to IDC.

In terms of shipments, 24.6 percent more Macs were shipped this past quarter than in the year-before quarter, an astounding level of growth next to PCs, which grew by 5.3 percent. It’s easy to argue that Windows PC sales are growing slower because typical Windows consumers don’t feel the need to upgrade as frequently, but you could also make the case that Apple is simply becoming a more popular choice when people want new laptops, especially well-designed models like the MacBook Air and MacBook Pro.

So what’s driving this adoption around the world? Analyst Charlie Wolf of Needham & Co. specifically noted to All Things D that new enterprise customers and strong growth in the Asia Pacific region have helped Apple sell more Macs, on top of just increasingly being a popular choice with consumers.

In the U.S. specifically, Apple saw 25.6 percent growth in sales, compared to PC growth of 4 percent. One thing Apple is having to contend with in the U.S. and around the world is also iPad sales, which may be cannibalizing some Mac sales. But Wolf noted that iPads are likely stealing market share from PCs more than Macs. And what supports that idea is that Mac growth is so much stronger than Windows PC growth while iPads continue to sell like hot cakes.

And if Apple still feels any market share envy toward Windows PCs, at least it can look to the tablet market, where it holds a crazy lead in market share. In the U.S. alone, the iPad makes up 83 percent of tablet sales, and around the world it counts for 73 percent of tablet sales. And, on top of that, the iPad is the clear leader in global tablet web traffic with 88 percent, far greater than all Android tablets and other tablets like the BlackBerry Playbook.

That’s a huge leap beyond the timetable put forward by former HP CEO Leo Apotheker, who previously said that the company would determine its PC division’s fate by the end of the year.

It shows that even at the beginning of her tenure, Whitman is already a more decisive CEO than Apotheker, who was ousted in September after a series of baffling decisions and slow sales quarters.

“We have to make a final decision about what to do with the PC division,” Whitman said while speaking at a conference about women in leadership yesterday. “It’s a decision I want to make much faster than my predecessor. I want to make it before the end of October.”

Apotheker stunned the technology world in August when he announced that HP would consider spinning off its $41 billion PC division. That same day, the company also killed off its webOS hardware, which included the Pre smartphone and failed TouchPad tablet.

What follows is a collection of our favorite Jobs moments, which may or may not have to do with technology, but offer a glimpse of insight into one of our greatest modern minds.

Steve says Microsoft has no taste

Jobs made it clear that he respected Microsoft’s success, but was saddened by the company’s complete lack of taste, in the 1996 PBS documentary “The Triumph of the Nerds: The Rise of Accidental Empires.“

“They don’t think of original ideas… And they don’t bring much culture into their product,” Jobs said. “I don’t have a problem with their success… I have a problem with the fact that that they just make third-rate products.”

Elegantly cutting down the competition, that’s so Steve.

Steve admits Microsoft helped save Apple… twice

Elsewhere in The Triumph of the Nerds, Jobs discussed how important Microsoft’s contributions to the first Mac were:

“Microsoft took a big gamble to write for the Mac. I brooded for a few months, but it was not very long after that that it really occurred to me that if we didn’t do something here, the Apple II was running out of gas, and we needed to do something with this technology fast or else Apple might cease to exist as the company that it was.”

Microsoft made its Office suite available on the Mac in 1989 before it even landed on Windows. The Mac Office suite continues to be a huge moneymaker for MS.

Microsoft’s second big Apple save came during Macworld Expo in 1997, when Bill Gates appeared on screen to announce that MS would be investing $150 million in Apple. The audience of Apple fans wasn’t exactly welcoming to Gates, but without the Microsoft deal Apple likely wouldn’t have been able to rebound as quickly in the late 90′s. Yes, you can thank Microsoft that Apple survived long enough to develop the iPod and iPhone.

Having the humility to let his sworn enemies save Apple, that’s so Steve.

Steve prepares young Stanford grads for life

Jobs’ 2005 Stanford commencement speech is one of his most cited works, perhaps because it’s one of the few times he’s opened up and given us a glimpse at his life philosophy. Throughout the speech, which is a must-listen, Jobs discusses why he dropped out of Reed College, love and loss, and of course, death.

Steve Jobs: Email ninja

Unlike most executives, Jobs may actually reply to you if you drop him a line — often to hilarious effect. Last year, the email master told a college journalism student to “Leave us alone” after she wrote him because Apple’s media relations team failed to get back to her. Also last year, Jobs also got into a late-night email exchange with Gawker blogger Ryan Tate, who was admittedly a bit tipsy at the time while complaining about Apple’s closed iOS ecosystem. That led to Jobs saying that the iPad provides “freedom from porn” since it doesn’t support Flash videos.

Being vaguely Orwellian after producing the iconic 1984 Apple ad? That’s so Steve.

Steve inspires Noah Wyle’s best performance ever

Sure, Noah Wyle may have been quite the actor on “E.R.” and “The Librarian: Curse of the Judas Chalice”, but I think it may have required all of his thespian talents to bring Steve Jobs’ personality to life in the 1999 made-for-TV movie “The Pirates of Silicon Valley.”

Below, check out the scene where Wyle’s Jobs believes that Bill Gates (played by Anthony Michael Hall) stole the idea of a graphical user interface for Windows from Apple. If that’s not so Steve, I don’t know what is.

Steve trash talks the mobile competition

Jobs made a surprise appearance on Apple’s fourth quarter earnings call last year, seemingly just to trash the company’s mobile competitors. “We’ve now passed RIM, and I don’t see them catching up with us in the foreseeable future,” he said during the call.

As for Android, Jobs said that the notion of it being open is a “smokescreen.” He added that “it’s really about fragmented versus integrated. We believe integrated will trump fragmented every time.”

He also had choice words for companies making 7-inch tablets, because he believes that screen size is too small for useful tablet apps. “One could increase the resolution to make up for the difference, but it’s meaningless unless the thing also includes sandpaper so users can sand down their fingers.” Ouch.

Steve knows how to give presentations

It’s difficult to write an article about iconic Jobs moments without at least mentioning his product reveals. Below find our favorites.

Thanks to VentureBeat’s Jolie O’Dell for the top Photoshopped pic

Jobs is the visionary who pulled together groundbreaking products such as the iPhone, the iPad and the MacBook Air. On stage, Jobs is the public face of the company who waxes eloquently about how Apple creates products at the “intersection of technology and the liberal arts.”

Cook, on the other hand, is a logistics and operations wizard. He isn’t nearly as charismatic of a speaker. In his career, his strength has been handling the nuts and bolts of running a big company, like making sure the company has enough memory chips on hand. The 50-year-old grew up in Robertsdale, Ala., the son of a retired shipyard worker. He is described as quiet, calm and unflappable.

Apple’s stock has understandably tanked in after hours trading, down 5 percent. But Cook has the full confidence of both Jobs and the board of directors, since this is now the third time that Cook has taken over as Apple’s top boss. Though his previous appointments as CEO were temporary due to Jobs’ illnesses. Cook ran Apple for two weeks in 2004 when Jobs was recovering from pancreatic cancer surgery. He became chief operating officer in 2005 and stepped in to run Apple for six months in 2009 when Jobs had a liver transplant. During that period, Apple stock rose 67 percent.

“As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple,” said Steve Jobs in his letter to the board of directors.

Meanwhile, Art Levinson, a board member and chairman of Genentech, said in a statement, “The Board has complete confidence that Tim is the right person to be our next CEO. Tim’s 13 years of service to Apple have been marked by outstanding performance, and he has demonstrated remarkable talent and sound judgment in everything he does.”

Cook has been responsible for all of Apple’s worldwide sales and operations. He managed Apple’s supply chain, sales activities, service and support in all markets and territories. He also headed Apple’s Macintosh division and played a role in the development of strategic reseller and supplier relationships. That means he had to arrange for multi-year supplies of memory chips and displays with giants such as Korea’s Samsung.

Before he joined Apple, Cook was vice president of corporate materials for Compaq. He also served as the chief operating officer of the reseller division at Intelligent Electronics. He also spent 12 years at IBM as director of North American fultiflment, where he led manufacturing and distribution functions. He has an MBA from Duke University and a bachelors degree in industrial engineering from Auburn University.

Stories on Cook have been plentiful in recent years, mainly because he appeared to have been the top successor. Gawker called him “the most powerful gay man in Silicon Valley.” In that story, Gawker described Cook as emailing his underlings starting at 4:30 am each morning. He devours energy bars during meetings and is often the first into the office and the last one out. Cook once dispatched an Apple employee to leave a meeting at the Cupertino office and head to China to go fix a problem.

“Why are you still here?” was Cook’s goodbye, delivered in the middle of the meeting.

Cook joined Apple in 1998, shortly after Jobs returned to Apple and replaced failed CEO Gil Amelio. Jobs reportedly had nixed a former Compaq executive within five minutes of starting a job interview. But Cook seemed like someone who couldn’t be unhinged by Jobs.

Cook clearly has the support of most of his employees, at least in terms of his ability to keep Apple on track in the near term. But the next big turning point in technology is going to be a challenge for Cook to spot.

“I think Tim is an OK replacement,” said one Apple employee who spoke to VentureBeat, on condition that he not be identified. “He seems to have some vision, which is what the position really needs. It is always hard replacing a benevolent dictator.”

The numbers indicate that Apple is releasing four new MacBook Air models — two 11-inch models and two 13-inch models. Both screen sizes are available with and without upgrades, according to the report. The Air won’t look much different from the current model, but will feature under the hood upgrades like a powerful Intel Sandy Bridge processor and quicker Thunderbolt expansion ports.

The same is true of the Mac Pro product numbers, which also indicate four new upgraded models  — Three different levels of desktop Mac Pros (Ultimate, Better and Best) and a new Mac Pro server model, according to the report.

The new Mac models will be the first to ship with Apple’s OS X 10.7 Lion operating system, which has 250 new features.

It’s a smooth move for Microsoft, since it gets Xbox 360s into even more dorm rooms, gives students one more reason to go with a Windows PC instead of a Mac, and is a great way to get rid of its low-end Xbox 360 stock (the 4GB unit doesn’t come with a hard drive).

Even better, Microsoft is allowing students to purchase any Windows 7 PC over $699 — though it recommends a few specific models like the sexy Samsung Series 9 ultraportable.

Apple has offered students similar deals in the past by offering them a free iPod Touch. But by offering students a free Xbox 360, Microsoft will also ensure that it has a presence on their televisions. At this point, the Xbox 360 is more than just a game console — it’s an entertainment centerpiece thanks to its support for Netflix, Last.FM, and Microsoft’s Zune Market.

Students can take advantage of the deal by purchasing a PC in online stores including Dell, HP and Microsoft’s with their .edu school email address. Additionally, students can bring their school ID to Best Buy or a Microsoft Store to purchase their computers in person.

The offer will be available from May 23 to September 3 — which should give students plenty of time to pick their preferred computers. I also suggest students check in with their schools to see if they offer additional discounts on Windows 7 PCs. Most higher education IT departments offer discounts on computer hardware and software.

We’ll be exploring the most disruptive game technologies and business models at our third annual GamesBeat 2011 conference, on July 12-13 at the Palace Hotel in San Francisco. It will focus on the disruptive trends in the mobile games market. GamesBeat is co-located with our MobileBeat 2011 conference this year. To register, click on this link. Sponsors can message us at sponsors@venturebeat.com.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The Sunnyvale, Calif.-based company can transfer data via differential signaling in a memory system at speeds of 20 gigabits per second, or about three times faster than is typical today. If it commercializes the technology, we could see much faster computers, game consoles and graphics cards in the future. Moreover, pretty much any system that uses 3D graphics will be able to deliver better imagery at lower costs and less power consumption, said Steve Woo, technical director at Rambus. These innovations improve the basic plumbing of chips, allowing memory to keep up with exponential increases in processor speeds.

The actual invention is faster “differential signaling for SoC-to-memory interfaces.” To understand what that means takes a little explanation. Rambus designs high-speed memory interfaces, which bridge together different components or chips. Rambus interfaces, for instance, connect the microprocessor and graphics chips with the memory chips inside the PlayStation 3 video game console. Rambus designs the parts, which are used under license by chip makers. It’s been a good business, as Rambus has been around since 1990 and generated $320 million in revenue in 2010. With the new invention, Rambus plans to license the technology to chip makers, who will design chips around them and launch products in the coming years.

Woo said that Rambus started working on the latest technology before 2007, when it announced its Terabyte Bandwidth Initiative. The interface connects a system-on-a-chip, or the brain of a high-end gadget, with the memory. It can send data along that highway at a speed of 20 gigabits per second. It does so by raising the speed limit of the highway, rather than adding more lanes to it.

The good thing about this technology is that it is backward compatible with older memory systems, including the GDDR5 and DDR3 memory chips that are used in most computers today. And Rambus can create the high-speed freeway without melting down the chips since the technology generates only 6 milliwatts ( a milliwatt is a thousandth of a watt) per gigabit of bandwidth. With something called FlexMode, Rambus can introduce the new signaling with no additional pins, which connect a chip to its neighbors on an electronic circuit board. For single-ended signaling (which uses fewer pins), Rambus can handle 12.8 gigabits per second data transfer. Woo said that Rambus has gone down the road it has — of speeding up the flow on the data pathway — because there isn’t much room inside a computer to add more wiring around the edges of computer chips.

“The industry is hitting the limits of what is possible,” Woo said.

All of these innovations are critical to keeping memory from lagging behind advances in processors. If memory isn’t fast enough, it slows down the system dramatically, since a processor can’t fetch data from memory fast enough to stay busy. Woo said that the advances are particularly critical for graphics cards and game consoles, which have an insatiable appetite for memory because the systems have to constantly fetch data from memory to create awesome images at high speeds. Today’s graphics chips can get data from memory at a rate of 128 gigabits per second, and future generations will push that to 1 terabit per second.

The previous record holder in the memory technology was Rambus itself. Rivals include memory chip makers who try to invent their own memory systems. Rambus has applied for patents on the technology, but those have not worked their way through the U.S. Patent & Trademark Office yet. (It usually takes six years). And Rambus has never been shy about exercising its patents. The company has been through years of litigation defending its patents, which are licensed by just about every major chip maker. In December, Rambus filed a patent infringement action against six major chip makers for an unrelated technology.

If there is some kind of PlayStation 4 or Xbox 720 game console being designed somewhere, you can bet that the product designers will strongly consider using the latest Rambus technology. The new Rambus technology is compatible with four-layer or six-layer motherboards, which are the circuit boards that are standard in the computer industry. The technology can be manufactured in a 40-nanometer factory such as those run by Taiwan Semiconductor Manufacturing Co., the industry’s biggest contract chip manufacturer. Rambus is currently in licensing talks with chip makers.

This is evident by the lines of pundits that snake around Apple Stores the world over whenever a new, sleek Apple product hits the shelves. But yesterday an Italian businessman and collector by the name of Marco Boglione took it to the next level by shelling out some serious cash at the famous Christie’s auction house in London for one of the very first Apple personal computers ever made, the Apple I. Boglione acquired the computer at a price tag of £133,250, or roughly $210,000. Original price? $666.66.

The computer, which is one of only 200 models ever produced, was originally built and marketed by Steves Jobs and Wozniak in 1976. When the Apple I was introduced, the computer had a fully assembled motherboard and was ready to use from the box – provided the user had a keyboard, a power supply and a display.

Boglione, the president of a holding company that owns European clothing line trademarks, is said to have the Apple I restored to working condition before adding it to his collection of Apple computers. The computer was auctioned in its original box, containing the motherboard, various components such as a microprocessor and extra RAM, and a sales letter signed by Steve Jobs. Steve Wozniak was present at the auction and also added an autographed letter to the lot.

The Apple I was officially discontinued in October 1977. Only about 50 Apple I computers still survive, and while rare, the remaining models are usually sold for much less, in the $15,000-$50,000 range, which might make this the most expensive Apple I ever. Boglione’s extraordinarily high price has probably more to do with the original documents – the return label has Jobs’ parents’ address, as Apple Computer, Inc. was set up in their garage – than the actual computer. Which kind of makes sense, too, since the Apple I has one-thousandth of the computing power of the iPad.

Photo: Apple I at the Smithsonian. Photo credit euthman.

The lawsuit, originally filed by Advanced Internet Technologies, accused Dell of hiding the extent of its computer’s hardware issues from customers. Dell settled the suit in September without disclosing terms.

To get a sense of the issue’s scale: The documents reveal 20.2 percent of a 2,000 computer batch purchased by the City of New York had incident reports on file. Of 2,800 computers purchased by Microsoft, 11 percent showed issues.

Dell apparently ranked its affected customers by importance, the documents showed, giving those who would move to another computer maker because of the issue the highest priority. Instead of recalling the computers, Dell performed “proactive field replacements” — which likely involved having technicians replace affected motherboards before they exhibited problems.

Dell’s hardware issues stemmed from the capacitors — small components that control power flow — on the motherboards of its desktop computers. The faulty capacitors (dubbed the “capacitor plague” on Wikipedia) have an intriguing story of their own — they were the result of a stolen formula by a Japanese scientist. The formula eventually found its way to a Taiwanese capacitor manufacturer, but not before going through some changes along the way that caused the capacitors to bulge and leak chemical fluid. Before the technology industry realized it, the faulty capacitors had found their way into computers, TVs and other electronics.

Other computer manufactures like Apple and HP were also affected by the faulty capacitors, but Dell has by far faced the most issues because of them. The company shipped 11.8 million affected computers between 2003 and 2005, according to a study by Dell and a third-party. The company announced in 2005 that it took a $300 million charge tied to fixing or replacing the affected computers.

A 2004 Dell study revealed by the court documents showed that the company had vastly underestimated how bad the situation would get. In June 2004 the company expected 12 percent of its SX270 and GX270 Optiplex computers would have trouble over their first three years — but by September, it raised that number to 45 percent and said it could very well go as high as 97 percent.

The study also showed that Dell planned to help customers who bought 50 machines and had at least 5 percent of those fail. Other customers were classified as “fix on fail”, which meant they couldn’t get help until their computer broke down. The company said it replaced motherboards for 22 percent of the 21 million computers it shipped during 2003 to 2005.

Dell also instructed its salespeople and technicians not to let customers know about the issues. Internal presentations (PDF link) contained phrases like “Don’t bring this to customer’s attention proactively” and “emphasize uncertainty” as directives Dell’s employees should follow.

I’m not at all surprised by the reports of Dell’s tactics, as I’ve seen many of them first-hand. I was working in desktop support during the height of this capacitor fiasco, and the issues carried on for years afterwards. We ended up stockpiling loads of Dell GX270 replacement motherboards and would replace them on-site when systems failed. But even some replacement motherboards had faulty capacitors, which made the whole ordeal a crazy Sisyphean support nightmare.

Dell doesn’t seem too phased by the whole ordeal, however. In its third-quarter filings today, the company announced its desktop PC sales are up 21 percent from a year ago and accounted for 24 percent of its overall revenue.

Photos via Maximiliano Kolus and 406 Coupe

For example, only one of the retailers AppleInsider tracks currently lists the cheaper 1.83GHz MacBook Air model in stock — others like Amazon, MacMall, and J&R are completely out of stock. The site also notes that most of the retailers offering the higher end 2.13GHz MacBook Pro are either completely out of stock, or incredible low on supply. This is the first time AppleInsider has noticed this phenomenon since it began tracking the MacBook Air’s supply two years ago.

Retailers like Best Buy and Amazon have also been told that Apple won’t replenish their stock until October 12 to 16, sources familiar with their buying operations tell AppleInsider. Such a delay in supply generally only occurs when Apple is preparing to revamp a product line, the sources say.

The current MacBook Air product line hasn’t been updated since June 2009, so it’s certainly due for a refresh. Apple is also no stranger to updating product lines in October — last year it announced a new iMac design and all-metal Macbook on October 20.

The supply shortage lends credence to rumors from Asia in September that Apple was looking to introduce a smaller 11-inch Macbook Air. Rumors of a smaller Air go back as far as July of this year, when sources said that Apple was aiming to make the computer smaller, thinner, and powered by a low-voltage “Core i” series Intel processor.

Honestly, there’s no reason why Apple wouldn’t want to release a smaller MacBook Air. Apple doesn’t provide sales data for the computer, but word on its sales has been negative for some time. It’s certainly nowhere near as successful as Apple’s more iconic MacBook and MacBook Pro lines.

A smaller and cheaper Air could be very tempting to many consumers, and it would be a way for Apple to take advantage of the newer low-voltage processors that many laptop makers are using today. Low-voltage CPUs generally allow for netbook-like battery life — with the added benefit of much more horsepower. Apple could also stand to offer an Air cheaper than the current low-end model at $1,499.

Apple’s iPad is so wildly successful that it seems to be stealing sales from laptops. A Morgan Stanley report shows that notebook sales growth has gone negative in August, and it appears to be because of the iPad, Fortune reports.

Further evidence came from Best Buy CEO Bryan Dunn, who said yesterday in a Wall Street Journal interview that the iPad had cannibalized its laptop sales by as much as 50 percent.

The Morgan Stanley report (see graph below) was based on data from the market research firm NPD, which showed laptop sales growth decelerating (except for a brief surge in February) since the announcement of the iPad in January. When the iPad was released in April, laptop sales growth stood at 11 percent — a figure that dropped steadily over the following months until sales actually fell in August by 4 percent compared to the same time last year.

The report’s author, Morgan Stanley’s Katy Huberty, said that data for the first week of September shows a similar 4 percent drop in sales. She concludes that the iPad, as well as future tablets, will put even further pressure on the PC industry.

NPD’s VP of industry analysis Stephen Baker estimates that the iPad’s cannibalization of the laptop market is about 15 percent, Laptop Magazine reports. “Just because sales are going down the same time iPad sales are out there doesn’t mean that there is this huge replacement right now of iPads by computers,” Baker said. Indeed, there are many other potential reasons why laptop sales have slowed — including a weak economy, and potential over-saturation of the laptop market.

To take advantage of its iPad sales, as well as increased sales of other portable gadgets, Dunn says that Best Buy will rearrange its inventory this holiday season to focus on smartphones, tablets, e-readers, and games. The company announced on Tuesday that it will expand iPad sales to all of its 1,093 stores in the US on September 26.

Given that the iPad was the first entry in an entirely new form factor of computing device, it’s not that much of a surprise that sales of more entrenched computers suffered. The situation is similar to what happened to the desktop computer over the past decade as laptops became more powerful and inexpensive — desktop sales suffered, and laptops became the dominant computing platform for most users.

Update: Best Buy just released a statement from CEO Brian Dunn:

The reports of the demise of these devices are grossly exaggerated. While they were fueled in part by a comment in the Wall Street Journal that was attributed to me, they are not an accurate depiction of what we’re currently seeing. In fact, we see some shifts in consumption patterns, with tablet sales being an incremental opportunity. And as we said during our recent earnings call, we believe computers will remain a very popular gift this holiday because of the very distinct and desirable benefits they offer consumers. That’s why we intend to carry a broad selection of computing products and accessories to address the demand we anticipate this season.

Getting content noticed is a challenge for everyone making apps. We’ll cover the topic at DiscoveryBeat 2010. Startups and big companies alike should consider entering our Needle in the Haystack discovery business idea competition. Early bird discounts are available until September 22. Sponsors can contact us at sponsors@venturebeat.com. To buy tickets, click on this link.