The new Acer AspireRevo R3600 (Acer AspireRevo R3610-U9012) that combines a dual core Atom 330 processor with the Nvidia Ion platform was introduced at the IFA consumer electronics fair in Berlin in September. It is just one of several interesting new nettops coming out now that will offer significantly more processing power, especially for video decoding, while still using little electricity.

Low cost, low power Atom CPUs in small desktop cases (nettops) such as the Asus EeeBox 202 first became popular about a year ago, following in the footsteps of their mobile cousins, netbooks such as the Asus Eee PC range. The latest generation of machines are adding new features and more performance, which will expand the market for low end machines.

Other machines with similar specs to the AspireRevo (dual core Atom 330, NVIDIA Ion chip set and 2 to 4 GB of RAM) include the Asus EeeBox EB1012, the ASUS EeeBox EB1501, the ASRock Ion 330 / Valore ION 330 and the Zotac MAG HD-ND01. In addition, people are building their own low power Atom 330 NVIDIA ION desktops based on mini ITX motherboards such as the ZOTAC ION ITX A Series or the ASUS AT3N7A Atom 330 motherboard and small cases such as the M350.

So what makes this latest bunch of machines so interesting?

First, they use the dual core version of the Atom, the 330 which will speed up multi-tasking as well as single applications that are multi-threaded (click here for a table comparing performance of the N330 to other CPUs).

Second, they abandon the rather pedestrian Intel 945GC chip set (which is basically a four year old design by now) and replaced it with the NVidia GeForce 9400 chip set (Intel Atom + NVidia 9400 = NVidia Ion). The new chip set not only supports DirectX 10 for Windows Vista and Windows 7 but also hardware decoding of digital video. This dramatically reduces the CPU load in software video players that take advantage of it, so that even a humble Atom CPU can keep up with high definition 1080p video streams.

Video performance may have been less of an issue on small netbooks with tiny 1024×600 pixel screens and lacking optical drives, but nettops and other desktops are more likely to use 20 inch screens and bigger that lend themselves well to watching video clips and movies.

Still, NVidia Ion is not a perfect solution for video yet. Amongst others, high definition Adobe Flash videos currently may still have problems because Adobe does not yet take advantage of decoding hardware even if present. For now, only Core 2 and other faster CPUs can cope with all video formats with all software, but Adobe has announced support for hardware decoding for Flash video before the end of the year, at least for the Windows version of Adobe.

NVidia Ion is also much more energy efficient than the Intel 945 GC Express chipset that was used in some earlier Atom nettops. While the Mobile 945 chipset used with single core Atom N270 netbooks (945GSE) is reasonably efficient, the desktop version of the 945 chip set used with the single core Atom N230 and dual core Atom 330 burns more than 20 Watt, over 5 times as much as the modest 4 Watt of the Atom 230 itself and 2 1/2 times as much as the 8 W of the 330. In fact the 945GCE is so inefficient that the cooling fan on the first Intel Atom desktop board had to be mounted on the 945 chip, not the N230 CPU which could be cooled with a passive heat sink alone. Less power than a conventional desktop means not only a lower electricity bill and a smaller carbon footprint, it also means less fan noise and heat.

A dual core Atom with the Ion chip set will actually consume less power than a single core N230 with the 945GC chip set (see GeForce 9400M Versus 945GC – Review Tom’s Hardware : Nvidia’s Ion: Lending Atom Some Wings for a full comparison of the two chip sets).

Another major benefit of the NVidia chipset is that it supports up to 4 GB of RAM while the 945GC and 945GSE are limited to 2 GB even though the Atom was capable of more. This limitation didn’t get much attention before because most Atom machines were shipped with Windows XP, which Microsoft did not allow to be bundled with machines that had more than a single GB of RAM, even though most of these machines could be upgraded to 2 GB by the user. However, if you add a 2 GB DIMM to a 945GSE board that already has 512 MB installed and one free slot, you will still only have 2 GB available, not 2.5 GB. The Ion removes this artificial barrier. Also, Ion boards typically have two DIMM slots while many 945 boards have only one. More memory is welcome because it often means less disk swapping, with a direct boost to performance. Ion offers better memory bandwidth too, which does help when both the CPU and the video chip have to share access to the main memory.

Most Ion boards have 3 internal SATA connectors and also one eSATA connector, while 945GC boards tend to have only two SATA and no eSATA ports. Having an eSATA port is great for using an external drive such as a Blue-Ray disk player or a an external hard disk subsystem such as the Guardian MAXimus external RAID-1 solution to provide robust Network Attached Storage (NAS) via a network-connected Ion machine. Ion nettops also tend to offer HDMI (a digital video link to digital TVs and monitors) and S/PDIF (digital multi-channel audio). Most have 6 or 8 USB ports and draft-N WiFi (802.11b/g/n). On top of that both 945GC and Ion support Gigabit Ethernet.

I’ve been checking online retailers for actual availability of the dual core Ion machines, but things have been moving slowly. I wonder if manufacturers have been holding back until after the Windows 7 release date on Oct 22, to avoid upgrade hassles. Who knows? For example, newegg.com stocks the ASRock ION 330 NVIDIA ION (which comes without any operating system) and the single core AspireRevo AR1600-U910H (which comes with XP), but any of the 2 GB or 4 GB dual core machines that for now are supposed to ship with Windows Vista, are not available yet. Likewise, Amazon sells a 2 GB single core version of the AspireRevo with Linux or a 1 GB single core version with XP, but no dual core version of it at all yet. Whatever the reason, for now you still have to be patient.

Hopefully more machines will gradually start hitting the stores by November and I certainly expect them in volume before Christmas. With a dual core CPU and the superior NVidia chip set, these carbon-saving small desktop machines are becoming viable for many new purposes, whether running Windows XP, Windows 7 or Linux.

“Does Linux stand a chance now that Windows 7 will run on netbooks?”, Shane O’Neill asks in an article in ComputerWorld on 15 January 2009 that overall sounds fairly optimistic on Microsoft’s prospects. However it largely avoids one crucial subject that matters for Microsoft in the struggle over market share in the booming nettop market: Money.

In 1985 Jack Tramiel, head of Atari Corporation came to visit Digital Research Inc. (DRI) to license its GEM graphical desktop environment for the new Atari 520ST. It was going to be a low-cost machine based on the same Motoroloa 68K CPU as Apple’s much more expensive Macintosh, which itself was a low-cost derivative of the Apple Lisa (that was long before Microsoft Windows became a viable product). Tramiel had a reputation as a fierce negotiator, so his counterpart at DRI, then the main competitor of Microsoft and Apple, was only half joking when he said to Tramiel: “Jack, I know you’ll probably start off by offering us a dollar per copy.” – “No,” replied Tramiel dryly. “50 cents.”

Tramiel knew that by coming out with a fully-functional product at rock-bottom prices he could grow the PC market. In the segment he envisaged there simply was no margin for a $50 operating system license. What was true when an Atari machine cost around $1000 is even more true today with $250-$450 netbooks, and future netbooks will be even cheaper than that. Soon we will also see netbooks based on the same low-power, low-cost ARM processors that power virtually all mobile phones.

Commentators cited by Computerworld on Windows 7 don’t really talk about money:

Analyst Rob Enderle, president of technology research firm The Enderle Group, agrees that Microsoft doesn’t see Linux as much of a threat and that refocusing on the netbook market is more about “Microsoft addressing the problem of having to keep shipping Windows XP long after its expiration date.”

Enderle says that getting XP on netbooks was clearly a response to Linux gaining traction, but that Microsoft is not afraid of consumers or OEMs having a preference for Linux.

“The problem was that Linux could run on a netbook and Vista couldn’t, not any consumer or OEM love for Linux,” he adds.

But Microsoft’s real problem wasn’t just that Vista was too big to fit on a 4 GB flash drive and too slow and bulky to run on an Intel Atom with 512 MB of RAM. It was also too expensive. So Microsoft could save face by charging next to nothing for its 5 year old Windows XP, but it didn’t make any real money on it. So what’s going to happen when Windows Vista 1.1 aka Windows 7 hits the streets in volume maybe a year from now?

Does it really matter to Microsoft shareholders and employees if the 21 million or so netbooks expected to be sold this year (and the even bigger numbers in 2010) will be running some version of Windows or a version of Linux (which is free), if previously those buyers would have picked up a more powerful machine that netted Microsoft $40-$100 per license?

Whether Windows 7 will run with decent performance on low-cost machines is really only half the question. The other is, how much Asus, Acer and the other netbook OEMs will offer to pay Steve Ballmer of Microsoft. Is it going to be $1 or 50c per copy? That is no way to sustain a business with a market capitalization of $150 billion and almost 90,000 employees worldwide (Jan 2009 numbers), as Microsoft is realizing to its horror.