Eyeing Intel, Nvidia's Ion wins three votes of confidence

Ion netbooks running Vista could be out by summer, following Microsoft certification today

Nvidia Inc.'s Ion, a CPU-and-graphics platform that the graphics chip maker hopes can help loosen Intel Corp.'s grip on the fast-growing netbook business, has garnered three key endorsements.

Most important is Microsoft Corp.'s announcement today that it had certified Ion-based PCs to run Windows Vista Home Premium.

Nvidia also announced today that one unnamed PC maker planned to build a mini-PC using the Ion platform. And No. 3 PC maker Acer Inc. said earlier this week that it is interested in building Ion-based PCs this year.

Ion is an Nvidia design that combines its GeForce 9400M GPU, the mobile version of one of its most powerful graphics processors, with an Intel Atom CPU.

The motherboard, amount of RAM and other specifications are not dictated by Nvidia, said company spokesman Ken Brown, but most expect Ion systems to use mini-motherboards suited for netbooks and mini-PCs.

Microsoft said its testing showed that Ion-based PCs will be able to deliver 1080p HD video, including Blu-ray movies; "exciting" video-game play using DirectX 10 video technology; support for premium Vista features such Aero Glass and Flip3D; and faster video transcoding and photo editing because of the Nvidia graphics chip.

Jon Peddie, an analyst at Jon Peddie Research, said the Vista certification is a "critically important" affirmation for Ion.

"Netbook builders haven't been able to get satisfactory operation with Vista. Part of the issue -- maybe all of it -- is the graphics," Peddie said in an e-mail. "Nvidia's theme is 'build a better notebook' with Atom by using Ion. And the proof of that is the certification."

It's an XP netbook world

With rare exceptions, such as Hewlett-Packard Co.'s Mini 2140 business netbook, virtually all netbooks today run Windows XP rather than Vista. That's partly because of XP's lower cost, but mostly because they lack the horsepower to support Vista, said Ian Lao, an analyst at In-Stat. The under-the-hood limitations prevent most netbooks from showing HD video, supporting more than one external display or playing the latest video games, he said.

Lao said that Ion delivers better performance than competing designs using Intel's integrated graphics chips, and at a similar price.

Nvidia promises that PC makers will start to deliver small and slim Vista PCs based on Ion this summer, for as little as $299, said Brown.

Nvidia has already released Windows 7 drivers for Ion, said Brown. He declined to comment on when Ion would be certified for Windows 7. Microsoft's upcoming OS is based on Vista but is widely reported to require fewer system resources than its predecessor.

While the most focus has been on Ion's potential to boost netbooks, Nvidia said today at a press conference in Taiwan that its first confirmed Ion customer is an unnamed PC maker that plans to build a mini-PC.

Lao said Ion will enable mini-PCs using dual-core Atom CPUs to close much of the performance gap with larger desktop models. And because the Atom and GeForce chips are so efficient and generate so little heat, PC makers can avoid the use of cooling fans, which will allow for smaller, sleeker designs than Apple Inc.'s Mac Mini -- at a lower price, he said.

Acer, the largest maker of netbooks, also said this week that it is considering using Ion in its PCs this year.

"You will see [Acer] looking at this technology much closer in our second-half products," Sumit Agnihotry, vice president of product marketing at Acer, told Laptop Magazine.

Lao expects other Taiwanese PC makers to throw their support behind Ion soon.

Intel GPUs pushed aside

Ion uses only Intel's Atom CPUs, including its faster, new dual-core versions. But it substitutes Intel's GPU for Nvidia's own.

That could cut into sales of Intel's GPUs, where it is the leader by shipments with nearly half of the market, according to Jon Peddie Research, but generally has an inferior performance reputation versus GPUs from Nvidia and Advanced Micro Devices Inc.'s ATI subsidiary.

Longer term, Ion will challenge Intel's attempts to define the segments of the PC market to maximize its own CPU profits, said Lao. For instance, PC makers will be able to build full-size "value" laptops with 15-in. LCDs that run Vista for less than $400, the current price barrier, using Ion and dual-core Atom CPUs.

This lets them avoid Intel's pricier Centrino CPUs, said Lao. And it allows PC makers to sell more systems while reaping the same profit per PC in these tough economic times.

Intel did not respond to a request for comment. Lao expects Intel to respond to Ion by aggressively pricing bundles of its Atom CPU and integrated GPU.

"They just can't sell at or below cost and get in trouble like Samsung and Hynix," Lao said, referring to the two firms that were found guilty of dumping memory onto the market.

Nvidia's Brown noted that Intel has made public statements that it will not obstruct the sale of Atom CPUs to PC makers interested in using Ion.

"I hope they live up to their word," Brown said.

Copyright © 2009 IDG Communications, Inc.

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