As an interesting side note to the debate today over Hewlett-Packard (HPQ), both bull and bear alike are pointing to Apple’s (AAPL) iPad as a hinderance to the company in the consumer PC market.

It had been known going into the call that consumer PCs were weak of late — IDC and Gartner both reported as much last month, and it showed in Microsoft’s December-quarter results. However, the 12% drop in consumer PC sales in the quarter was worse than many expected, and led to a 1% drop in its personal systems group revenue for HP, despite an 11% increase in sales of computers to corporations.

CFO Cathie Lesjak noted on the conference call last night that “consumer softness was predominantly in netbooks, consumer desktops in the US and notebooks in China,” and CEO Leo Apotheker promised the company would do better over the course of this year, stating, “We look forward to providing a differentiated seamless experience across our tablets, smartphones, printers, PCs, and future [form factors].”

Shebly Seyrafi, Capstone Investments, in a note to clients today quotes the argument from the bears, namely that, “HPQ is pointing to weakness in consumer, when the real problem is that its notebooks are being cannibalized by tablets, where Apple is in a premier position.”

Seyrafi is not buying into that argument entirely, but does concede the point to a degree: “We believe that both factors are at play,” he writes.

But Deutsche Bank analyst Chris Whitmore, who has a Hold rating on HP shares, is more concerned: “We believe iPad cannibalization of consumer PCs is a long term trend and a meaningful contributor to the revenue shortfall,” he writes.

Now, HP, of course, is preparing to ship a tablet computer, the TouchPad, which it showed off earlier this month, and which may be arriving as soon as April.

Whitmore’s not yet convinced it will save HP: “While webOS tablets and phones appear promising, the ecosystem supporting the platform is small, requires significant investment and tablet hardware is not expected until this summer.”

HP shares are currently down $5.13, or almost 11%, at $43.12.

Article courtesy of Tech Trader Daily

G20 May Agree On Imbalance Measures (WSJ)
The official, who is party to the discussions in Paris, said there is “almost consensus” on which indicators to use but that China still opposes some. He said China’s negotiators are resisting including current-account imbalances and the real effective exchange rate among the indicators. He also said China and several other countries that have built up large reserves are against using currency reserves to indicate imbalances.

Krawcheck Slaps Cut-Pay Garden Leave on BofA Advisers (Bloomberg)
“They’re sending the message, ‘Make no mistake, you will incur our wrath, this is not a place you want to leave,’” said Mindy Diamond, president of Diamond Consultants LLC, a Chester, New Jersey-based executive-search firm. “It’s very rare that a company would have garden-leave provisions for producers, and I think this could backfire if people view it as draconian.”

Fed Chief Says U.S. Bolstered Its Ability to Handle Failure of a Big Bank (NYT)
Ben Bernanke told the Senate Banking Committee that it would be some time before all of the rules of the new law were in place but that regulators had begun to tighten risk standards and “certainly we’ve all learned lessons from the crisis.” When Senator Richard C. Shelby of Alabama, the ranking Republican on the committee, asked what those lessons were, Mr. Bernanke replied, “The importance of being very aggressive and not being willing to allow banks, you know, too much leeway, particularly when they’re inadequate in areas like risk management.”

Tim Geithner Joins NYSE Name Push (NYP)
Geithner said he “very much” agrees with Sen. Chuck Schumer (D-NY), who has been trying to wield his political clout to ensure that “New York” comes first in the name of the new entity that emerges from the pending $10 billion tie-up. “I’ve talked to at least 10 experts and all of them say that the NYSE is a much stronger brand than Deutsche Boerse,” Schumer told The Post.

Wall Street Pay Still Doesn’t Consider Risk, Study Finds (NYT)
Many financial firms continue doling out bonuses without considering how it affects behavior, according to a study released Thursday by Deloitte Touche Tohmatsu. The study found that only 37 percent of financial institutions surveyed by Deloitte had substantially incorporated risk-management concerns into their compensation decisions.

Banks Like Barclays Find Loophole On Dodd-Frank Capital Rule (WSJ)
In November, Barclays PLC quietly changed the legal classification of the U.K. bank’s main subsidiary in the U.S. so that the unit would no longer be subject to federal bank-capital requirements. Several other banks based outside the U.S. are considering similar moves, according to people familiar with the matter.

SEC Questions Mutual Funds’ Muni Prices (WSJ)
The agency’s concern is that investors in high-yield muni-bond mutual funds could be misled about the true value of their investment, according to people familiar with the matter.

Warren Buffet’s White House Words Of Wisdom (CNBC)
Buffett says he feels lucky to have been born in the United States, lucky to have found what he loves doing very early in life, and “extremely lucky in that the two most important people to me in my life, my dad and my wife … they both extended to me unconditional love. And there’s no power on earth in my view like unconditional love.”

A-Rod leaving 15 CPW, buying penthouse at The Rushmore (NYP)
No more knocking on neighbor Lloyd Blankfein’s door for a cup of sugar.

Egyptians Say Military Discourages an Open Economy (NYT)
Though some Western analysts have guessed that the military’s empire makes up as much as a third of Egypt’s economy, Mr. Rachid said it was in fact less than 10 percent. But economists say that because of its vested interests they still worry that the military will impede the continuation of the transition from the state-dominated economy established under President Gamal Abdel Nasser to a more open and efficient free market that advanced under Mr. Mubarak. Moreover, the military’s power to guide policy is, at the moment, unchecked. The military has invited no civilian input into the transitional government, and it has enjoyed such a surge in prestige since it helped usher out Mr. Mubarak that almost no one in the opposition is criticizing it.

Buffett Says Pricing Power Beats Good Management (Bloomberg)
“The single most important decision in evaluating a business is pricing power,” Buffett told the Financial Crisis Inquiry Commission in an interview released by the panel last week. “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”

Financial Regulator Appoints Top Team (WSJ)
Elizabeth Warren named two former Wall Street bankers and a former Freddie Mac official to senior posts at the Consumer Financial Protection Bureau, creating a face for the new regulator that is more friendly to the financial industry than some critics had feared. Ms. Warren appointed Rajeev V. Date, her adviser at the Treasury Department and a former Deutsche Bank managing director, to head the regulator’s research, markets and regulations team.

Article courtesy of Dealbreaker

Things aren’t looking great for Cisco’s consumer tech sector, where product orders dropped 15 percent in the most recent operating quarter compared to the same quarter a year ago.

That’s despite the release of the Cisco Umi, a web-connected camera that sits on top of televisions that’s designed for home video conferencing. It was an attempt to bring the company’s popular enterprise-class telecommunications hardware to everyday consumers, but the price tag was a bit absurd — $600 for the actual device, plus an extra $25 each month to use the service.

Cisco’s price for Umi was telling in and of itself — there’s a pretty big disconnect between Cisco and the consumer marketplace. Cisco doesn’t have that much reach in the consumer space, outside of wireless router sales. The company’s orders from enterprise customers were up 10 percent last quarter when compared to the same quarter a year earlier, and orders from the public sector were up 7 percent.

The company’s overall sales were up 6 percent in the second quarter of its 2011 fiscal year, from $9.8 billion in its 2010 fiscal year to $10.4 billion. But its net income fell by around 18 percent to $1.5 billion (or 37 cents per share) in the second quarter of its 2011 fiscal year, from $1.9 billion in its 2010 fiscal year. That decline was in line with the consensus estimate of 35 cents per share by Wall Street analysts.

The Cisco Umi experiment seems like it didn’t go as well as planned. The rest of Cisco’s product orders grew while consumer orders shrank by 15 percent. Overall, Cisco’s product orders were up 8 percent, according to a presentation given during the company’s conference call. Cisco is also traditionally seen as an enterprise technology bellwether because it has a massive reach in both the commercial and governmental space.

Cisco did warn that governmental sales were slipping, and lowered its profit outlook for the next quarter as a result to between 35 and 38 cents per share. The consensus estimate of Wall Street analysts was an outlook that had Cisco earning around 40 cents per share in the next quarter. Investors didn’t really like the new guidance and sent Cisco’s shares down about 9 percent in extended trading to $20.12.

Tags: Cisco Umi, consumer tech, enterprise, teleconferencing, Umi

Companies: Cisco

Article courtesy of VentureBeat » deals

Things aren’t looking great for Cisco’s consumer tech sector, where product orders dropped 15 percent in the most recent operating quarter compared to the same quarter a year ago.

That’s despite the release of the Cisco Umi, a web-connected camera that sits on top of televisions that’s designed for home video conferencing. It was an attempt to bring the company’s popular enterprise-class telecommunications hardware to everyday consumers, but the price tag was a bit absurd — $600 for the actual device, plus an extra $25 each month to use the service.

Cisco’s price for Umi was telling in and of itself — there’s a pretty big disconnect between Cisco and the consumer marketplace. Cisco doesn’t have that much reach in the consumer space, outside of wireless router sales. The company’s orders from enterprise customers were up 10 percent last quarter when compared to the same quarter a year earlier, and orders from the public sector were up 7 percent.

The company’s overall sales were up 6 percent in the second quarter of its 2011 fiscal year, from $9.8 billion in its 2010 fiscal year to $10.4 billion. But its net income fell by around 18 percent to $1.5 billion (or 37 cents per share) in the second quarter of its 2011 fiscal year, from $1.9 billion in its 2010 fiscal year. That decline was in line with the consensus estimate of 35 cents per share by Wall Street analysts.

The Cisco Umi experiment seems like it didn’t go as well as planned. The rest of Cisco’s product orders grew while consumer orders shrank by 15 percent. Overall, Cisco’s product orders were up 8 percent, according to a presentation given during the company’s conference call. Cisco is also traditionally seen as an enterprise technology bellwether because it has a massive reach in both the commercial and governmental space.

Cisco did warn that governmental sales were slipping, and lowered its profit outlook for the next quarter as a result to between 35 and 38 cents per share. The consensus estimate of Wall Street analysts was an outlook that had Cisco earning around 40 cents per share in the next quarter. Investors didn’t really like the new guidance and sent Cisco’s shares down about 9 percent in extended trading to $20.12.

Tags: Cisco Umi, consumer tech, enterprise, teleconferencing, Umi

Companies: Cisco

Article courtesy of VentureBeat » deals

Intel made a big deal at the recent Consumer Electronics Show about how its Sandy Bridge combination graphics-microprocessor chip has been one of its most successful in history. But it spoke too soon. Now the world’s biggest chip maker said it has discovered a design flaw in the chip’s companion chip set, forcing a production delay that will cost it $1 billion in lost revenues and replacement costs.

The delay could derail the shipment schedules for more than 500 computers using the Sandy Bridge processor, which combines graphics and a microprocessor in a single piece of silicon. That’s going to be bad for the PC industry, since Intel can’t supply millions of new chips overnight. That could give an advantage to rival Advanced Micro Devices, which is shipping a rival combo processor under the Fusion platform name.

Intel said it will reduce its revenue target for the first quarter by $300 million and incur repair and replacement costs of $700 million. That’s the biggest quality problem since the Pentium bug hit Intel in 1994, when Intel recalled a math-flawed processor at a cost of $400 million. It’s a big black eye for Intel CEO Paul Otellini, pictured, but in all likelihood, this sounds like a mistake that one or two engineers made in designing a small part of a very big chip.

The tough part for Intel is that it can’t fix the chip with a simple software update. It has to remake the chips in its factories, and that causes a delay of weeks for computer makers who want to ship their machines now. Since Intel won more than 500 designs for Sandy Bridge, the delay could affect sales for the entire PC industry.

Intel said it discovered the flaw in the recently released support chip, code-named Cougar Point, and has had to redesign the silicon. That could mean a delay of 12 weeks (the typical time it takes to get a chip through a factory) in getting corrected chip sets to customers. Cougar Point had flaws in its Serial ATA (SATA) ports, which means that SATA-linked devices such as hard drives and DVD drives might not work properly over time. Cougar Point is a companion chip set for Sandy Bridge, which itself was not affected by any design problem.

Intel said it expects to deliver the updated version of the chip set to customers in late February and expects a full recovery of production volumes by April. The company said it would accept the return of the Cougar Point chip sets. The systems with the bad chips have been shipping since January 9 and there are relatively few consumers who already have flawed systems in their hands. The potentially affected consumers are those who bought second-generation Core i5 and Core i7 quad-core systems.

For the fourth quarter of 2010, Intel will take a charge against earnings related to chips shipped during that quarter, reducing the expected gross margin percentage by 4 points from the previously reported 67.5 percent. The company will also take a charge in the first quarter, reducing gross margin percentage by 2 percentage points and the full year by 1 percentage point.

Separately, Intel said it recently completed the acquisition of Infineon Technologies’ Wireless Solutions business. And it expects to complete the $7.6 billion acquisition of McAfee by the end of the first quarter. For the first quarter, Intel now expects revenue of $11.7 billion, plus or minus $400 million, compared to the previous expectation of $11.5 billion, plus or minus $400 million. Yes, that’s actually higher than previously expected, since the market is better than it was in the last forecast. But gross margin percentage is now expected to be 61 percent, compared to the previous expectation of 64 percent.

Tags: Cougar Point, Sandy Bridge

Companies: advanced micro devices, Intel

People: Paul Otellini

Article courtesy of VentureBeat » deals

Lonely Analyst Warns Of 2015 Crisis Amid Upbeat Davos (Bloomberg)
“The fundamentals haven’t been addressed at all,” Barrie Wilkinson, a London-based partner at consulting firm Oliver Wyman, said in an interview at the Hotel Morosani Schweizerhof. “The things that caused the previous crisis — loose monetary policy and trade imbalances — they’re actually bigger now than they were then.”

Opposition Ramps Up Pressure On Mubarak (WSJ)
A coalition of opposition groups called for a million people to take to Cairo’s streets Tuesday to ratchet up pressure on President Hosni Mubarak to leave…In the most significant change, the interior minister—who heads internal security forces—was replaced. A retired police general, Mahmoud Wagdi, was named to replace Habib el-Adly, who is widely despised by protesters for brutality shown by security forces.

Moody’s Cuts Egypt’s Rating, Warns On Spending (Reuters)
“There is a strong possibility that fiscal policy will be loosened as part of the government’s efforts to contain discontent,” Moody’s said in a statement. “A background of rising inflationary pressures further complicates fiscal policy by threatening to increase the high level of budgetary expenditure on wages and subsidies.”

Nouriel Roubini: Egypt’s Protests Negative For Growth (CNBC)
“There’s already political contagion from Tunisia to Egypt… geopolitical risk is on the rise,” Roubini told CNBC in an interview. “It has a negative effect on growth or rising inflation. All this is not good.” But he added that the situation wasn’t as serious yet as to lead to another recession. “Even if in the past recessions have been associated with oil price shocks caused by geopolitical risk… we’re not yet there but rising oil prices, risk aversion, these are all negative for the markets,” Roubini said.

Business Operations Halt In Egypt (WSJ)
Dutch brewer Heineken NV, chemicals company Akzo Nobel NV, consumer-products giant Unilever NV, Japanese auto company Nissan Motor Co. and General Motors Co. of the U.S. were among the companies suspending production.

Egypt Spurs Jump In Developing Money-Market Rates (Bloomberg)
The last time short-term borrowing costs in developing nations rose this fast was the second half of 2008, when the global financial crisis and record commodity prices pushed the world economy into a recession.

A Fund Manager Ensnared (WSJ)
The hedge-fund manager—Samir Barai, the 39-year-old founder of New York-based Barai Capital Management—didn’t return calls for comment. Prosecutors haven’t disclosed any charges of wrongdoing against Mr. Barai in the still-unfolding investigation. FBI agents raided his fund in November, the people familiar with the matter say, but the fund’s identity hasn’t before been made public.‪ Mr. Barai made his name at Citigroup in a high-profile hedge-fund position and he used that affiliation to help market his own fund, according to people familiar with the firm. His role in the investigation involves conversations and trading that took place after Mr. Barai left Citigroup in 2007, and there is no indication the bank is implicated in the probe.‪

Climber falls 300m down a mountain – and survives (Guardian)
In seconds Adam Potter fell 300m (about 1,000 ft) down the side of Sgurr Choinnich Mor, gathering pace as he fell. He tumbled down a rough scree slope – fortunately cushioned by deep snow – and bounced over three cliffs, each perhaps a hundred feet high, scattering his kit behind him. His body twisted, heels over head. Miraculously, Potter survived. He came to rest 800m above sea level with a skinned and bloodied face, whiplash, back injuries and wrenched shoulders, when his downwards momentum was finally arrested by a boulder. He thinks the rock briefly knocked him out.
Growth Stocks May Fizzle As Rebound In Market Favors Value (Bloomberg)
Growth stocks in the U.S. have “dominated value for well over the last year, hardly a surprise given investors’ preference for emerging markets to domestic exposure,” Graham Bishop and Ian Richards, equity strategists at Royal Bank of Scotland Group Plc in London, wrote in a Jan. 12 report. “But as domestic concerns subside and valuations become stretched, we expect investors to switch into the ‘value’ catch-up candidates and out of the recent ‘growth’ winners.”

United, Delta Profit at Risk From `Silent Killer’ in Fuel Hedges (Bloomberg)
U.S. airlines including United Continental Holdings Inc. and Delta Air Lines Inc. may see 2011 profits eroded as an indicator of jet-fuel costs surges to a two-year high. Most carriers try to smooth fuel-price swings with advance purchase contracts linked to the cost of crude or heating oil, a proxy for jet fuel. Those with hedges tied to crude futures have been less protected against rising costs, with the difference versus heating oil jumping more than 50 percent this month. “This is out of control,” said David Cush, chief executive officer of Virgin America Inc., the low-fare carrier partly owned by U.K. billionaire Richard Branson. “This is a kind of silent killer. It has a huge impact on airlines.”

Americans Pick Up Spending (WSJ)
Consumer spending grew by 0.7% in December, the Commerce Department reported Monday. Americans’ incomes rose by 0.4% for a second month in a row.

Bankers Expect 13 Percent Bonus Deferral (Reuters)
Investment bankers working in Britain expect, on average, 13 percent of their bonuses will be deferred, according to a survey published on Monday by financial services recruitment firm Astbury Marsden. The survey’s findings showed most bankers were fighting recommendations made by European Union regulators for at least 40-60 percent of top bankers’ bonuses to be deferred over 3-5 years. “Below vice-president level, most staff are not ready for the idea that they have to accept another year of deferred bonuses,” Astbury chief operating officer Mark Cameron said.

Article courtesy of Dealbreaker

Enterprise cloud storage provider Box.net is launching a new version of its software that includes a new front-facing interface built from scratch and additional mobile features, the company announced today.

The new Box.net interface is a mash-up of micro-blogging activity streams like FriendFeed and online storage like Dropbox. Box users can drag and drop files from their computer directly onto the site to send files into cloud storage. There are also folders that are synched up directly with the cloud, like Dropbox, that automatically update files as they are changed.

Users can preview those files directly within Box.net — and the software supports a lot of file formats. Box developer Kim Lockhart showed off the capabilities by opening up Adobe Illustrator files within the web interface and previewing other files from Photoshop and the like. Whenever any file is viewed, commented on or changed, Box.net users get an update on their activity feed.

“This basically kills the software problem,” Lockhart said. “You can view files like illustrator files and pretty much anything else as we move forward without ever having to have the software.”

The idea was to remake the front-facing application from scratch because it was becoming too complicated with too many features. Box.net released a new update just about every week last year and added more and more features, and that was clouding up the service and making it too complicated for some end users, said Box.net CEO Aaron Levie. While Box is mainly focused on the enterprise, Levie said Box had plenty of potential in the consumer space — to compete with cloud storage providers like Dropbox and the like.

The new version of the cloud storage service will also include an app marketplace that includes other cloud-based applications, like NetSuite and Salesforce, that can sync up with Box.net. The idea is to spread the applications virally by including notifications of co-workers adding applications and using them in each activity stream. Box.net is also expanding its relationships with VMWare, NetSuite and other companies to ramp up those applications.

Throughout the presentation, one Box.net employee in the crowd was adding photos and documents on the cloud storage provider’s demonstration account to show off the new mobile. Box.net wants to focus on tablets — specifically Android tablets — in the future after seeing some pretty decent success on the iPad, Levie said. The Box.net application was downloaded more than 250,000 times on the iPad. But the company launched the Android application in the fourth quarter last year and already has 70,000 downloads. Samsung is working with Samsung specifically on to further develop its application on Android tablets like the Samsung Galaxy Tab.

“The iPad really opened up the enterprise’s eyes with what was possible with mobile computing and tablet computing,” Levie said. “It’s not just about email, web applications, it’s actually about getting rich business tools on mobile devices.”

The software will roll out to Box.net’s customers over the next 30 days and launching today. For the first month, users can switch back and forth between the new and old interface. But after a certain period of time, only the new user interface will be available for Box.net users.

Tags: Android, cloud storage, enterprise cloud computing, enterprise storage, iPhone operating system

Companies: Box.net

People: Aaron Levie

Article courtesy of VentureBeat » deals

Somehow in the rush of everything going on Friday, I happened to miss Mark McKechnie of Gleacher & Co.’s interesting note about Motorola Mobility (MMI).
McKechnie reflects on the new “Atrix” phone from Moto announced at the Consumer Electronics Show last week. It runs a dual-core “Tegra 2″ chip from Nvidia [...]

Article courtesy of BARRONS.com: Tech Trader Daily

Online home finder Trulia just went global, announcing today it has formed a partnership with ListGlobally, an international property listings firm, to allow users outside the States to look for homes here as the tug-of-war between for homebuyers, sellers and renters looking for properties online continues to heat up.

Trulia not only gives you a list of properties in a neighborhood, it also lets you plot them on a map, search by keywords, and narrow your results based on distance from a specific location.

It also lets you rate each property based on the area’s schools, night life, safety and more. Users can then share that data with others on a building, block or neighborhood level.

Although initially launched as a buying-only site, Trulia quickly followed the leader in the space, Zillow, into rental listings last April, and is now eyeing ListGlobally’s presence in 17 countries as it reaches our to overseas buyers looking for homes in the U.S.

Trulia says that 5 percent of its overall traffic is currently from international buyers, with as much as 10 percent of its traffic in large cities such as Miami, New York, Las Vegas and Los Angeles coming from interested buyers abroad.

Zillow, which already leads the pack of housing search startups, added support for rentals six months prior, in December 2009. It does not currently offer a global component but did announce today it has added a feature to let home buyers and sellers search for and find local real estate agents based on ratings and reviews from former clients.

Trulia saw impressive growth in 2010: Consumer inquiries to real estate agents were up 54 percent; visits to the website and via mobile have grown by 66 percent; property views have grown by more than 50 percent and mobile traffic spiked more than 400 percent year-over-year.

On average, Trulia consumers view more than 2.2 million properties per day, or around 90,000 properties views per hour.

Whether those stats and this new strategic partnership will be enough to help Trulia catch Zillow — which logged more than 13 million unique users in December, a year-over-year traffic growth of 77 percent — remains to be seen.

“Bringing international home listings to our current audience is a natural extension of our services. This is a global market place and we are excited to offer homes for sale across the globe,” Pete Flint, CEO and co-founder of Trulia, told me today. “Not only are investors looking for properties overseas, but we know lots of retirees and professionals are moving around the globe.”

Tags: real estate

Companies: listglobally, Trulia, Zillow

People: Pete Flint

Article courtesy of VentureBeat » deals

PrimeSense has raised a round of private equity funding as part of its plan to expand its motion-control chips beyond Microsoft’s Kinect game console product.

The funding comes from Silver Lake Sumeru, a private equity firm. The amount wasn’t disclosed. But it was likely a hefty round since PrimeSense is sitting in a good spot now. Microsoft has scooped up two other rivals, so there aren’t as many chip suppliers doing 3D sensing.

“A year ago, this was like science fiction,” said Inon Beracha, (pictured above), chief executive of PrimeSense. “Seeing the response of the consumer to Kinect is overwhelming. I heard a four-year-old was explaining to his father how to use Kinect. It’s so natural.”

PrimeSense designs chips that can capture the movement of people in a 3D space. It processes those images and feeds them to software that translates them into control inputs for game consoles.

PrimeSense’s chips are used in the 3D camera that is the backbone of the Kinect motion-control system, which saw spectacular sales of 8 million units since its debut on Nov. 4. With Kinect, Steve Ballmer, chief executive of Microsoft, bellowed at his keynote speech at the Consumer Electronics Show, “You are the controller.” That means you use your body to control the game. It took a lot of preparation to line up the supply chain for the Kinect launch, Beracha said.

Tel Aviv, Israel-based PrimeSense is now expanding to customers in the TV and PC markets. Asus showed off its Wavi set-top box, which can wirelessly connect to both a TV and a PC. It takes content stored on the PC and displays it on the TV. The PrimeSense chips allow users to surf through the content using their own hand and body gestures.

Asus plans to launch the Wavi in the second quarter. Other companies are also planning to launch PrimeSense-based systems this year, Beracha said. One of the customers is in the IPTV, or internet protocol TV, market.

PrimeSense calls its technology Natural Interaction Technology. It enables 3D mapping of everything in a room and gesture recognition. It can be used in consumer electronics devices such as TVs, game systems, and PCs. It allows people to get rid of their remote controls and use natural motion instead.

Silver Lake Sumeru is a $1.1 billion middle market tech-focused fund started by Silver Lake Partners, the Menlo Park, Calif.-based private equity firm with $14 billion in assets. Silver Lake’s investments include Skype and Avago. Paul Mercadante, managing director of Silver Lake Sumeru, said that the 3D gesture-recognition technology could revolutionize the way consumers interact with living room devices. Mercadante is joining PrimeSense’s board.

The technology isn’t perfect yet. PrimeSense is working on improving the field of view so that devices such as the Kinect can recognize movement in a wider 3D space. The company is also trying to improve the accuracy, or resolution, of the recognition.

Previous to today’s funding, PrimeSense had raised $39.4 million from investors including Gemini Israel Funds, Genesis Partners and Canaan Partners. Rivals include Optrima, a sister company to Softkinetic. Others rumored to be working on technology include Samsung, PMETec, and Mesa Imaging. Check out the video of Beracha using the Asus Wavi below.

Tags: gesture control, motion control

Companies: Primesense, Silver Lake Sumeru

People: Inon Beracha

Article courtesy of VentureBeat » deals