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Dell has ordered between 1 million and 1.2 million desktop computers with Advanced Micro Devices processors and about 800,000 notebooks, Bank of America financial analyst Sumit Dhanda said in a report Thursday.

The new machines are likely to arrive late in the third quarter or early in the fourth, Dhanda said, citing sources in the manufacturing supply chain in Taiwan. That would mean Dell is awarding AMD 15 percent to 16 percent of its desktop business and 18 percent to 19 percent of its notebook business, he said.

Dell currently has announced plans only for a four-processor server using AMD's Opteron processor, but sources told CNET News.com that the computer maker is expected to announce a broader AMD partnership Thursday that includes more mainstream dual-processor servers as well as desktop and mobile computers.

Dhanda raised his estimates for AMD's financial performance because of the deal. His price target for AMD went from $19 to $23 per share, while his expectation for fourth-quarter revenue rose from $1.38 billion to $1.51 billion.

However, Dhanda believes AMD's profit margins are under pressure because of higher expenses, changes from the plan to acquire graphics chipmaker ATI Technologies, and Intel's new competitiveness.

Answering Intel's "Montecito" processor launch this week, IBM on July 25 will announce new high-end Unix servers using its own Power5+ processor, sources familiar with the plan said.

The Power5+ processor, a faster successor to the Power5 that's used in the existing top-end 32-processor p5-595, is expected to run initially at a top speed of 2.3GHz.

Toni Sacconaghi, the Sanford C. Bernstein analyst who has for years been unimpressed with Sun Microsystems' attempts to improve its business, awarded the company a more optimistic business rating.

Sacconaghi raised his rating for Sun from "under-perform" to "market perform" in a report Tuesday. Granted, part of the reason was that Sun's stock has slipped well below $4 per share--it closed at $3.82 on Monday--but Sacconaghi also said the upgrade was because of his belief that "positive change is afoot at Sun."

The stock price slip now indicates the market has absorbed the fact that Sun's layoff of 4,000 to 5,000 employees is smaller than some expected, Sacconaghi said. And he believes new Chief Executive Jonathan Schwartz and returned Chief Financial Officer Mike Lehman will be able to "find the right formula of cost cuts and growth to generate notably improved operating margins over the next two-plus years." Sun is the only company on the S&P 500 list to have gross margins above 40 percent but operating margins less than 5 percent for all the last three years, he said.

The analyst also expected investors might come to a more favorable view of the company from two new factors: new AMD Opteron servers announced Tuesday, including a high-end eight-processor machine and a new blade server, and expected solid financial performance for the quarter ended June 30, the last of Sun's fiscal 2006.

Persistent rumors in recent months that Scott McNealy may step down as Sun Microsystems' chief executive returned in force Thursday, as reports of the possibility appeared in the Wall Street Journal and San Francisco Chronicle.

The stories came as computing industry sources reported in recent months that major changes could be in the works at Sun, in particular with the return of Chief Financial Officer Mike Lehman. Lehman has said that he'll reveal and begin a new Sun strategy in July and that he's "taking a fresh look at everything." Some expect deep layoffs.

One former Sun insider has heard Chief Operating Officer Jonathan Schwartz will become CEO, Lehman will take over as COO, and McNealy will remain chairman. Another rumor gives the CEO spot to Lehman. But McNealy, who already has survived several tough years without being ousted by the board, has shown little indication he wants to throw in the towel.

"I'm here for the duration. I'll do whatever I can in whatever capacity I can," McNealy said at an analyst meeting in February. Sun declined to comment.

"Scott still seems very engaged in this company," Sanford C. Bernstein analyst Toni Sacconaghi said earlier this month, but change could take place. Sun's board appears more focused on restoring revenue growth and profitability.

"The question is...how much will Scott be comfortable in terms of cost-cutting and redirection," Sacconaghi said. If there are major cuts and changes, "he may be less comfortable and may choose to move to a less involved role."

BOSTON--Sun Microsystems' Solaris operating system now runs on x86 servers such as those Dell sells, but the company will consider adding support for the Unix version only if it becomes a standard part of the computing landscape.

That's the conclusion of Judy Chavis, director of business development for Dell's enterprise product group, who spoke in an interview at the LinuxWorld Conference and Expo here.

"Is it the next industry standard around operating systems? That's what it would take for us to do that," she said. So far, the answer is a definitive no. "Since the year started, I haven't had a Solaris x86 customer come into the briefing center," Chavis said.

Dell evaluated Unix years ago, including Solaris, but eventually chose to stick with Linux. In the intervening years, Sun nearly killed off its x86 version of Solaris but now puts it front and center of its push to make a name for itself in the x86 server market.

"There have been a couple bumps in the road with Solaris. It's going to take customers awhile to believe it's here on the x86 platform and it's going to stay," Chavis said.

Dell said this week that it will ship wide-screen displays in its Latitude D620 and D820 laptops.

The D620 has a 14.1-inch wide-screen display while the D820 offers a 15.4-inch wide-screen display.

Laptops with wide-screens can increase worker productivity by improving the viewing of spreadsheets, monitoring-software and office programs. One practical business application, for example, is that the new wide-screen D620 and D820 laptops will make sales presentations more appealing.

Dell Latitude D620

Of course, nobody is going to buy the laptop for productivity. The laptop is going to be sold for watching movies on business trips and for gaming at home.

An article this week by CNET News.com reporter Tom Krazit reinforces my claim that everyone just wants something nice to use for viewing flicks. In Krazit's article, industry analyst Roger Kay said he believes that business users will appreciate the larger screen for viewing larger portions of spreadsheets at one time and also for watching movies.

The dual-processor core and 512MB Nvidia Quadro NVS 120M TurboCache video card in the D820 mean that these systems are not designed just for great movie graphics, but also for decent gaming. The laptop doesn't have the guts offered in the new Dell Alien gaming systems, but it makes a really nice compromise, especially considering that it will likely have to be justified as a work purchase. Did I mention how incredibly efficient it will make you at work (wink, nod)?

The laptops also feature mobile broadband that can connect to the Cingular Wireless or Verizon Wireless networks in the U.S. or to Vodafone's network in Europe. According to Cingular, its BroadbandConnect service using UMTS/HSDPA technology provides average download speeds of 400kbps to 700kbps, while its EDGE network provides average download speeds of up to 135kbps. BroadbandConnect is available today in 16 U.S. markets. Cingular expects BroadbandConnect to be available in most major U.S. markets by the end of this year.

The cost of the D820 and D620 laptops is around $1,230 but will vary by configuration. Unlimited BroadbandConnect service costs $59 per month.

Several StorageTek executives have departed since Sun Microsystems acquired the tape storage specialist last year, according to an article in Computer Business Review.

Among them are Randy Kerns, vice president of strategy and planning; David Harrison, former StorageTek vice president of worldwide operations; Brenda Zawatski, vice president of information lifecycle management; and Thomas Despres, general manager of StorageTek's main manufacturing plant in Puerto Rico. Kathleen Holmgren, a longtime Sun executive who was vice president of disk products, also is departing, and two more vice presidents are expected to follow suit, the report said.

In a response to the report, Sun said in a statement, "We currently have a strong and focused leadership team, and are confident and fully prepared to aggressively execute on Sun's data management strategy.

Sun paid a net amount of $3 billion in cash for StorageTek, a move that helped bring some much-needed revenue growth to the beleaguered server and software company.

Other executive departures from Sun include John Loiacono, head of software; Bob MacRitchie, head of global sales and Clark Masters, head of government sales.

Supercomputing is on the verge of a new era of interactivity, and an IBM thinker forecasts that the change will have wide repercussions among those accustomed to submitting processing jobs and returning days or even months later for results.

"A petroleum engineer might accelerate the discovery process by quickly trying different kinds of analysis and visualization to pinpoint a potential oil field. Automotive engineers could continuously refine their designs to achieve a balance of aesthetics, safety and economics, much the way we keep formatting and reformatting documents until satisfied with the result," said Irving Wladawsky-Berger, who has led efforts at IBM to retool for e-commerce, Linux and other significant transformations, in his blog.

The change is significant because it puts supercomputing into a realm of technology that is better adapted to how humans think and tackle problems, he said.

"This goes to the essence of how humans prefer to deal with the world and solve problems. We do something, get a response, and then adjust and build on that response. It feels natural to break a problem into a series of steps and keep adjusting to the feedback, whether it is driving a car, talking to a person or interacting with a computer application," he said.

Technology is of course at the root of the change. "Continuous improvements in microprocessors, storage and other technologies are a major factor in this transition. Equally important are the advanced architectures that permit supercomputers to be built from the inexpensive components of the PC and consumer electronics worlds, so that the considerable computing capacity generally required to support interactive applications can be delivered at affordable prices," Wladawsky-Berger said, unsurprisingly pointing to Blue Gene and other IBM products to illustrate his point.

Dell would gain market share over rivals if it adopted Advanced Micro Devices' processors, but changes in its relationship with Intel would likely more than nullify the business merits of the move, an analyst said Monday.

"Overall, it seems unlikely that Dell's share gains would be enough to offset the potential loss of Intel marketing monies," Sanford C. Bernstein analyst Toni Sacconaghi said in a report addressing the recent opinions that Dell would embrace AMD.

Adopting AMD could win Dell 1 to 2 percentage points of server market share and 0.5 to 1 percentage points of desktop share, Sacconaghi calculated. These gains would lead to about $250 million to $350 million in new operating profit, but it's not clear whether that "would be enough to offset the potential loss of Intel marketing monies that Dell derives from being Intel-exclusive," Sacconaghi added.

Dell stands to gain from the situation--and Intel stands to lose. "The growing strength of AMD puts Dell in a favorable bargaining position with Intel, in our view. Even if Dell does not move to adopt AMD, it is likely to continue to use them as a leverage point to gain further concessions from Intel. Intel seems likely to lose revenue and/or margin, either because Dell defects or because it is forced to offer incremental concessions to Dell to maintain their loyalty," Sacconaghi said.

Dell's rivals are pushing AMD chips for PCs because customers have accepted the chip there and profit margins are better than with Intel chips, Sacconaghi said. Specifically, he estimated that operating margins increase 1 to 2 percentage points, a huge difference in a business with typical margins between 0 and 3 percent.

In contrast, customer pull is boosting AMD in the server market because of "AMD's superior memory and performance characteristics of its 64-bit architecture," he said.

For both PCs and servers, Dell's "lack of an AMD offering does appear to at least in part be an explanation of Dell's weak share performance at the high end of both of these markets," he said.