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Hewlett-Packard announced Sunday that it has settled its patent-infringement lawsuits against rival PC maker Acer.

The confidential settlement agreement resolves three federal court lawsuits, as well as two U.S. International Trade Commission investigations between the parties.

HP sued Taiwan-based Acer in October 2007, alleging seven patent violations. The suits covered patents regarding technologies such as read/write optical drives, power management in notebooks, digital bus arrangement, thermal management and video control.

The suits sought to stop Taiwan-based Acer from exporting its PCs to the U.S. and selling them there. As a result of the settlement agreement, each action will be dismissed as to the parties.

Yahoo and Microsoft used the press to negotiate for several months regarding a potential merger. Now it appears Acer and Microsoft are having a public spat. Or, if they aren't yet, Acer's comments Wednesday will likely start one.

In an interview with VNUNet.com, Acer Vice President of Marketing Gianpiero Morbello said his Taiwanese PC maker has big plans to develop the market for Linux, not only on its low-cost ultraportable, but on the company's laptops as well.

The Acer Aspire One is just the beginning of Acer's foray into the Linux world, according to a company exec.

(Credit: Acer)

The reason is because of the cost and operation of Microsoft's operating system over open-source Linux.

"We have shifted towards Linux because of Microsoft," said Morbello. "Microsoft has a lot of power and it is going to be difficult, but we will be working hard to develop the Linux market."

Acer officially unveiled its entry into the low-cost mini-laptop market, the Aspire One, on Tuesday. It will come in both Linux and Windows XP flavors.

It makes sense to try to cut as much cost as possible out of building a device like the Aspire One, which will start at $379. The attraction to such a device is mainly price, and expectations of a full set of features can be relatively low. Plus, as Acer points out, Linux has a quicker boot time and can extend the battery life of tiny Netbooks like the Aspire One.

But will mainstream PC shoppers go for Linux when they're used to buying a Windows notebook? It's unclear if Acer, currently the No. 2 notebook seller in the world, will be foisting Linux on reluctant consumers or just looking harder for places and markets that have yet to fully embrace Windows.

After months as the subject of speculation in the media, Acer will introduce its own low-cost mini-notebook PC at the Computex trade show in Taipei on Tuesday.

The device will be called the Acer Aspire One, as expected. It will come with an Intel Atom processor, and run Linpus Linux Lite, with Acer's own user interface. Other specs include: an 8GB solid-state drive, 512MB of RAM, 802.11 b/g WiFi, an 8.9-inch screen, and a standard 3-hour battery.

Acer Aspire One will begin at $379.

(Credit: Acer)

The Aspire One will be available beginning July 2 for $379. Later that month, a version running Windows XP Home Edition with an 80GB hard drive, and 1GB of RAM will be available, though the pricing details on that have yet to be ironed out.

As this niche of computing begins to become more crowded, the specs are beginning to look more or less the same. Price and little details like keyboard and exterior design are going to be the most distinguishing factors.

At $379, the Aspire One is cheaper than the runaway hit Eee PC from Asus, whose 9-inch version begins at $549 for the Linux version, and the $499 Linux-based Hewlett-Packard Mini-Note. (CNET has not yet reviewed the Aspire One, but stay tuned.)

Besides pearl white, Acer also plans to offer a bright blue version, and eventually pink and brown. The keyboard isn't quite as large as the Mini-Note's 92 percent keyboard, coming in at 89 percent of the standard size keyboard for a 14-inch notebook.

But just like its direct competitors, Acer sees two distinct customers for the Aspire One: school kids and the highly mobile tech-savvy set.

Acer's plan it seems is to use its Aspire One as sort of a gateway-PC (No pun intended.) for the uninitiated PC user.

"It's a great device that is a stepping stool to a first-time notebook user," said Sumit Agnihotry, director of notebook product management for Acer America. That way kids can "bypass the desktop completely (and move) to a notebook in less than 18 months."

And if there's something Acer's gotten good at lately, it's moving notebooks. It sells more notebooks than every other computer maker except for HP.

Acer says it sees the mini-notebook as a third device for geeked-out consumers after a smartphone and a standard notebook PC, claiming that "it's much more a single application with an Internet-centric focus," Agnihotry said.

But is it more devices we're after? Or fewer? The genius of the smartphone is how much it can do. With the $379 price point not all that far removed from some of Acer's more inexpensive full-size notebooks, is selling someone on the lack of features of the Aspire One really the way to win customers?

It's clearly not for the mainstream PC users, who generally expect the best features and latest-generation processors when purchasing a new PC. But the company doesn't seem to see any overlap between those customers, saying it doesn't expect this will "cannibalize" its current notebook business at all.

Up-and-coming PC maker Acer is shifting its lineup a bit.

At its first-quarter investor relations conference in Taipei on Wednesday, Acer President Gianfranco Lanci said the company would release its first smartphone--a Windows Mobile device--by the end of this year or early next year, and that smartphones will account for 10 percent of company revenue.

Acer: Smartphone is due in the next year.

(Credit: E-Ten)

Acer made its interest in the smartphone market very clear in March, when it purchased fellow Taiwanese company E-Ten, which makes smartphones under the Glofiish brand.

At the conference, Acer said E-Ten would shift entirely to smartphones and away from PDAs, which it has sold in the past. In another change, the new Acer smartphone will be sold through wireless carriers, instead of directly to retail, as E-Ten has historically done.

Acer has played catchup to its PC rivals this past year, growing organically as well as through acquisition. The company bought U.S.-based Gateway and Europe's Packard Bell, and now finds itself behind No. 2 Dell with 9 percent of worldwide market share, according to IDC.

But will Acer be able to stir up the smartphone industry the way it has PCs? It's obviously not impossible for a new smartphone maker to enter the market and quickly scoop up share (hello, iPhone), but Acer is obviously no Apple. It doesn't have the same marketing machine or demonstrated design chops. But it doesn't have to make the next iPhone to find success. Betting on the evolution of mobile computing from laptops to a smart device like a phone is a no-brainer at this point.

Is it just me or was Dell on top of the world a few years ago? Not only was it pummeling just about every other PC manufacturer in the industry, its online business was buzzing and its business integration was better than ever. And then it all came crashing down.

Last year, Dell announced that it was cutting 8,800 jobs from its payroll and Thursday the company said that it has already laid off 5,550 employees in an attempt to cut costs and make the company more financially sound.

"We are not satisfied with the current state of affairs and are on a mission to fix it," Reuters quoted Dell saying. "Every area of the company is being pursued" for cost cuts.

To make matters worse, last week Dell announced that it was closing one of its desktop manufacturing facilities as part of its layoff program and indicated that it wants to reduce expenses by as much as $3 billion per year over the next three years.

And while many would say that Dell is moving in the right direction, I'm not so quick to agree. How can a company that sat atop the entire computing industry for so long become a shadow of its former self in just two years? Is it that Dell has had a string of bad luck or did Hewlett-Packard, Acer and the rest finally find a way to take the company down?

Sadly, it looks like the latter.

Rumors continue to persist about Dell getting back into the handheld business.

The latest is from Digitimes (which should be taken with a grain of salt) which is reporting that Dell has placed orders with several Asian manufacturers for smartphones, PDAs, and GPS devices. Digitimes says those devices would run Windows Mobile. That differs from the rumor floating around in late January that Dell was about to announce an Android-based handset.

As of this writing, Dell had not yet responded to requests for comment.

After axing the Axim, above, is Dell placing orders for a new handheld product?

(Credit: CNET Networks)

It's been almost a year since the company ended production of its popular Axim handheld, and even longer since it brought on Ron Garriques from Motorola to run the company's consumer business.

So what is Dell up to? Its biggest competitors, Hewlett-Packard and Acer, both have made commitments to this product category. Acer recently showed how serious it's taking this market when it purchased smartphone and PDA maker E-Ten earlier this month for $290 million.

An industry source tells CNET News.com that at least back in November Dell was considering devices with screens under 7 inches.

What that device is or could be isn't clear--a GPS player that does video, a smartphone that plays music? But it could be that Dell is just throwing around some ideas, trying to stake out a place in the market, sensing how active it is and will continue to be.

"The question is, what do you position in that space?" said Roger Kay, analyst and president of Endpoint Technologies. "It's likely to be a high-volume market at some point, and you wouldn't want to be left out."

Plus, Intel's new Atom processors mean that there are better options for makers of small devices. Dell could be "responding to the availability of the silicon by preparing a device," Kay pointed out.

The Acer 8920

(Credit: Acer)

We first told you back at CES about the laptop industry's move towards 16- and 18-inch laptops, highlighted by a 16-inch Dell prototype and our off-the-record discussions with several other vendors about these new screen sizes.

Acer is leading the charge with two new multimedia-oriented consumer laptops, the 16-inch Acer Aspire 6920 and the 18.4-inch Acer Aspire 8920. Both are part of what Acer is calling the Gemstone Blue series.

We just got a peek at these two new systems in person at a press event in New York, and while they're not going to be game-changers, there are a few highlights worth noting.

The new screen sizes allow for true 16:9 aspect-ratio displays, which means Blu-ray or other HD content will fit the screen better--look for similar displays from other vendors in the coming months.

The CineDash Media Console

(Credit: Acer)

Acer has also made a big investment in sound, offering 5.1 speakers in the 18-inch version and 2.1 speakers, with Dolby virtual surround sound, in the 16-inch. Both also offer virtual headphone surround.

Intel Penryn-class CPUs and Nvidia's GeForce 9500 or 9650 GPUs are standard, and Acer claims its new displays are brighter, with better color range, than the previous Aspire models.

The most interesting part was the unique capacitive touch media controls. Instead of running a simple line of media buttons along the top of the keyboard (even budget laptops such as the Dell 1525 have capacitive touch-sensitive controls these days), the media controls are boxed off to the left of the keyboard in a panel called the CineDash Media Console.

It's the same general concept, but the high-tech layout makes it stand out--you get a volume circle, basic play/pause/transport controls, and a few other media player keys.

Look for these two new systems to hit retailers some time in April, starting at $900 and going up to around $1,700.

Continuing its spending spree, Acer announced Monday it plans to acquire E-Ten for $290 million.

Based in Taiwan, E-Ten has been around for more than two decades, and part of its business includes manufacturing Pocket PC phones and PDAs for other companies. But it's probably known best to consumers by its Glofiish consumer brand name, established less than two years ago.

Acer buys Glofiish maker E-Ten

(Credit: Glofiish)

With this purchase, Acer, also based in Taiwan, appears laser-focused on becoming a major mobile player. Thanks to its acquisitions of both Gateway and Packard Bell, it's already taken out Dell as the second-largest manufacturer of notebooks. Now it appears ready to jump into the handheld computing fray.

"The acquisition of E-Ten increases Acer's global footprint by giving us a strong and highly credible presence in the mobility segment," J.T. Wang, CEO of Acer, said in a statement.

It's interesting that Acer has apparently been in the market for a mobile phone company and bypassed Motorola, which was, even if only temporarily, up for grabs. Instead, it went for a relative unknown (outside of China), that is likely far cheaper but, more importantly, one that specifically makes smartphones, rather than flip phones and their ilk.

Acer apparently sees value in the smartphone trend. Regarding the announcement, Acer President Gianfranco Lanci added, "The worldwide smartphone market is estimated to grow by more than 30 percent by 2011. Acer will enhance the competitiveness in the ultramobile segment, by combining PC and communication technologies."

Smartphones are increasingly becoming tinier versions of laptops. And they're only going to keep getting smarter, more connected, and more powerful. So for a company that is doing well shipping a lot of notebooks, finding a way to sell even smaller versions of those computers makes a lot of sense.

The European Union gave its official blessing to the union of Acer and Packard Bell on Wednesday.

After reviewing the $48.5 million acquisition of Packard Bell by Taiwan-based Acer, the European Commission (the executive branch of the EU) ruled that the two companies as a combined entity would pose no threat to fair competition in the European PC market.

"The Commission's examination showed that the proposed merger would entail horizontal overlaps for desktops and laptops, both for professionals and consumers, at the EEA (European Economic Area) and national levels," the ruling read. "However, the market would remain competitive post-merger in all segments of the PC sector with established alternative suppliers such as Hewlett-Packard, Dell, Fujitsu-Siemens, Toshiba, Sony, and Lenovo."

With that settled, Acer now finally has what it was looking for--a legitimate foothold in the European PC market. The Taiwanese PC maker's decision to bid for Packard Bell last fall was twofold: to instantly find currency with European PC buyers using Packard Bell's established branding, as well as block rival Lenovo's similar ambitions in Europe.

With Packard Bell and Gateway under its umbrella, Acer is now the third-largest supplier of PCs in the world, according to data collected by IDC.