The iPhone 3G may have a lock on the Sexiest Gadget Alive title for 2008, but in the frumpy and boring world of things that matter to enterprise IT managers, it's no pinup.

Despite Apple's improvements upon the previous iPhone, primarily through its licensing of Microsoft's ActiveSync technology, the 3G and its iPhone 2.0 software remain less competent and less tested than its BlackBerry and Windows Mobile counterparts.

[ For more on bringing the iPhone into the office, read "How to make the new iPhone work at work." ]

"From an IT support standpoint, you want a hardened device, something you can fire and forget," said Todd Christy, president and CTO of Pyxis Mobile, a smartphone application maker. "I think the iPhone is cool, but it isn't there from an enterprise standpoint."

"It's a great product but has a ways to go," said a senior IT official at a large U.S. business who, after evaluating the iPhone 3G, chose not to deploy it, citing weaknesses in configuring, securing and supporting the iPhone up to enterprise standards.

"A year after Apple comes out with a consumer device, these kinds of enterprise things are not going to happen magically," said the official, who declined to be identified.

So on exactly what tracks does the iPhone still lag?

1) Manageability and security

When it comes to employees' smartphones, IT managers may seem like the worst kind of control freak. And for good reason -- nothing is as easily lost or stolen as a smartphone, along with its corporate data.

RIM's ability to ease IT managers' worries has been key to the BlackBerry's success. It introduced device management software, BlackBerry Enterprise Server, at the same time it launched the device itself back in 1999. Today BES, as it is affectionately called, lets IT managers enforce more than 200 security and other IT policies, as well as create their own.

Microsoft is attempting to challenge BES' dominance. Earlier this year, it released System Center Mobile Device Manager. SCMDM, as it is often abbreviated, gives IT managers 125 built-in policies for managing Windows Mobile 6.1 phones, as well as the ability to create their own.

SCMDM's biggest strength may be its integration with the popular Active Directory technology, which lets IT managers reuse their carefully tweaked set of employee privileges and access rights with little extra work.

Jonas Gyllensvaan, CEO of mobile management software vendor Conceivium Inc., expects SCMDM to "make big inroads by the end of the year."

For IT managers not on SCMDM, their experience remains firmly in the second tier, with 45 policies available to them via Microsoft Exchange 2007 SP1's ActiveSync. Policies include numerous ways to manage passwords, control whether phones and storage cards must be encrypted, and turn on or off the phone's camera, consumer e-mail account, or text messaging.

"That's still very robust, and a lot more than what the average IT person in the mid-market or enterprise needs," said Scott Gode, vice-president of marketing and product management for Azaleos, a provider of outsourced Exchange server management.

The iPhone 3G uses the same ActiveSync technology in Exchange 2007 SP1, but experts place the iPhone in a third tier. "The Windows Mobile implementation of ActiveSync is, from an IT admin point of view, far superior," said Ahmed Datoo, vice-president of product marketing for mobile software maker Zenprise Inc.

Why? Because many ActiveSync features are missing. Those features include the ability to limit users from downloading some or all third-party software, the ability to turn off expensive international data roaming, and the ability to natively encrypt data on the iPhone or its storage card.

The lack of native encryption is the iPhone's "one failing," said Glenn Edens, an independent mobile consultant, who is otherwise bullish on the iPhone 3G. "Remote wipe helps but is not good enough."

Without encryption, the District of Columbia, which is testing the iPhone 3G now, would only deploy the iPhone 3G by keeping key applications and data off the device, said Vivek Kundra, CTO of the governmental body.

At least one ISV, SplashData, has already come up with a third-party encryption app. But as David Gewirtz, an e-mail security expert, put it, "everybody prefers stuff from the manufacturer."

The dearth of built-in management features is in contrast with the iPhone's many built-in consumer features, such as its 2-megapixel camera, its music and video player and fast Web browser. These all create more potential security and compliance problems and ways for the device to be misused.

For instance, employees goofing off by downloading TV programs from iTunes can "interfere with other users trying to run critical applications across the same wireless LAN network," said David Messina, vice-president of marketing for network management software maker, Xangati Inc. "Think about environments like hospitals, where WLANs are critical to patient care."

For sure, Apple won't stand still. But for now, its enterprise manageability is "enough for it to gain a beachhead, but not enough long-term for Apple to get the market share it wants," Gode said.

2) Network and deployment

The iPhone has one advantage over RIM: All messages and updates are routed directly from server to smartphone and vice-versa.

Syncing with a BlackBerry, meanwhile, requires updates to be sent to RIM's Canadian network operations center, outside of a corporate firewall. That NOC has been prone to failure in the past year, frustrating BlackBerry users.

So score one for the iPhone -- and Windows Mobile, for that matter -- versus RIM. However, application and patch deployment is another matter.

Most consumers will add applications to their iPhone via the iTunes client, which connects to the Web-based AppStore controlled by Apple.

That setup is unacceptable to most companies, who generally prefer a larger degree of control over what, which and how applications are added to employee smartphones.

There are two alternatives , one existing now and one slated for the future. The first is enabling the setup of an'ad hoc' restricted list of iPhone users who are allowed to download a given app via AppStore. Ad hoc distribution is available today, though there are many reports of problems. Moreover, it doesn't scale past 100 users, making it suitable only for smaller firms or workgroups.

The other is letting companies essentially run their own mini-version of AppStore on their own servers so they can oversee which apps are served up to the copies of iTunes running on employees' PCs. Employees connecting their iPhones via cable to their desktop or laptop computer then automatically receive applications uploaded to their devices.

There are several problems. For productivity reasons, many companies don't want to allow employees to install iTunes on their work PCs. Moreover, relying on employees to sync their iPhone with their PC is slower and less reliable than directly pushing out apps, updates or patches wirelessly, which both BlackBerry and Windows Mobile allow.

Finally, Apple hasn't said when enterprise deployment will be available. Some observers don't think it will arrive until the middle of next year.

Rob Woodbridge, CEO of Rove Mobile, a maker of systems management software for smartphones, thinks Apple at that time needs to bring out a full-fledged solution along the lines of BES or Microsoft's SCMDM, one that enables IT folk to install more policies and apps wirelessly.

"That's what they need to do if they really want to sell into the enterprise," he said.

3) Technical support

Big companies are used to getting the white-glove treatment for the big bucks they spend. Is Apple, which has little enterprise presence, up to providing that? What about AT&T?

Not according to the unnamed IT official, who said multiple, escalating levels of support -- widely available for BlackBerry and Windows Mobile users -- didn't appear to be an option today.

"Would we even have an Apple account management team to support us? Probably not," the official said.

Others, such as Ahmed Datoo, vice-president of product marketing for mobile software maker Zenprise, say reports of'bricked' iPhone 3Gs and unavailable MobileMe services earlier this month don't build confidence, either.

As a result, says Xangati's Messina, companies wanting to deploy iPhones on a wide scale need to resign themselves to beefing up their own in-house support.

"The iPhone is going to be a mobile enterprise device in the same vein as a laptop. If there are issues with it, the help desk is going to have to be involved," Messina said.

4) Application ecosystem

Having 500 applications available at the iPhone 3G's launch was impressive. And no doubt that number will grow, fast. But the fact remains that there more than 18,000 applications available for Windows Mobile at public Web storefronts such as Handango.com.

And while the BlackBerry platform remains difficult for developers, there are still nearly 4,000 BlackBerry apps at Handango.com, along with thousands more custom business apps.

Of course, many business apps have already been ported over to the Web. For these, no porting is needed -- iPhone users can simply fire up Safari. But many applications still run better as clients. And some of those ISVs, such as Rove Mobile, say they are in no hurry to port their products over to the iPhone.

5) Cost and carrier choice

The iPhone 3G may only cost $199, but its true cost over the life of a typical two-year contract with AT&T is at least $2,000 (including voice plan, unlimited data plan and $5/month for 200 text messages). Pricey for a consumer toy, but comparable to a BlackBerry or Windows Mobile smartphone.

Rather, the true cost for an enterprise switching to the iPhone comes from the substantial investments in money, time and personnel those firms have already made in BlackBerry devices, multi-year contracts, BES servers, and the like.

And there is the matter of Apple's preference to sign a single carrier in each market for the iPhone, in contrast to the multi-carrier availability of BlackBerries and Windows Mobile phones. The District of Columbia's Kundra says the biggest hurdle to deploying the iPhone widely is AT&T's spotty geographical coverage.

Their surveys said...

Only 1 out of 25 senior wireless executives queried by Immobile.org for a poll earlier this month expect both corporate IT admins and employees to embrace the iPhone. Three out of four expect the iPhone to make few inroads and for Research In Motion, the maker of the BlackBerry, to maintain or strengthen its lead.

Another survey, by investment bank Goldman Sachs, found that 17 percent of 100 Fortune 1000 CIOs polled plan to buy an iPhone, though the Wall Street Journal, which reported the survey, opined that the figure "strikes us as pretty high." The survey also did not ask those CIOs how many iPhones they plan to buy -- a key point.

"I think companies will start to put the iPhone on their approved list, but I don't see many making it their standard-issue device," said Gyllensvaan.

The lust created by the iPhone 3G could even help end up helping its competitors. Rove's Woodbridge thinks that IT managers may try to steer employees demanding an iPhone 3G to sexed-up BlackBerries such as the upcoming Bold and Thunder models, or to touchscreen-based Windows Mobile phones such as the HTC Touch Diamond.

Computerworld is an InfoWorld affiliate.

This is typically one of the slowest weeks of the year for IT news, but the approach of Hurricane Gustav has Gulf Coast IT departments in full-out preparedness mode and the rest of the country anxiously watching with sharp memories of Hurricane Katrina, which hit that coast and devastated New Orleans on Aug. 29 three years ago. Also in the news were woes with an Oracle forum upgrade and Google offering credit to paying customers of its online Apps suite, to compensate for three Gmail outages earlier this month.

1. New Orleans IT departments brace for Gustav and Cellular operators say they're ready for Gustav: IT departments that learned valuable lessons for coping with disaster in the wake of Hurricane Katrina are preparing for the possibility that Hurricane Gustav will hit the U.S. Gulf Coast. Cellular operators say that they are prepared for the storm as well.

2. Oracle technical forum upgrade plagued with problems: Oracle "upgraded" its technical forums last weekend, but the changes have left some users unable to access the forums, prompted error messages and caused a general slowdown in performance. By week's end, Oracle apologized for the downtime users were experiencing and said it was working to restore performance levels.

3. Google extends Apps Premier credit for Gmail outages: Google is giving Apps Premier customers of its hosted Apps suite extensions of annual subscriptions for 15 days at no charge to compensate them for three Gmail outages earlier this month. Were committed to making Google Apps Premier Edition a service on which your organization can depend. During the first half of August, we didnt do this as well as we should have, reads an apologetic letter Google sent to those customers.

4. Atom demand still stymied by testing bottleneck: A testing bottleneck continues to keep Intel from meeting the strong demand for its Atom processor, designed for small laptops called netbooks. Intel underestimated end-user demand for the chips, and its testing process gives priority to more expensive chips that have a higher average selling price than does Atom. Thus, the ongoing bottleneck.

5. Performance improvement integral to Windows 7, IE8: Fixing performance issues with past versions of the Windows client OS and Internet Explorer are key goals of the development teams at Microsoft, according to company blogs. "We've re-dedicated ourselves to work in this area (performance) in Windows 7 (and IE 8)," according to an Engineering Windows 7 blog post. "This is a major initiative across each of our feature teams as well as the primary mission of one of our feature teams."

6. Comcast sets monthly bandwidth limit for customers and Critics question Comcast broadband caps: Comcast will limit residential customers to 250G bytes of bandwidth monthly as of Oct. 1. Those who exceed the limit will be contacted and told to curb their broadband use and, if in the six months after that warning the customer again goes over the limit, their service will be suspended for a year. Critics challenged aspects of the move, raising questions they said have not been answered, including "what's the point?" given that few users will likely be affected, at least for now.

7. Judge finds Qualcomm in contempt of injunction: Qualcomm is in contempt of an injunction that prevents it from selling some products that use patented Broadcom technology, a U.S. federal judge ruled. Qualcomm was ordered to pay royalties to Broadcom for revenue derived from QChat version 3.0, push-to-talk software that Qualcomm was ordered by the court to stop selling. The company also has to pay Broadcom gross profits from QChat service and support.

8. Steve Jobs' death greatly exaggerated; Bloomberg obit a mistake: The whoops entry for the week is courtesy of the Bloomberg financial news service, which inadvertently posted the obituary of Apple CEO Steve Jobs. Bloomberg quickly retracted the obituary. News organizations often have such stories written in advance so that they can be quickly rolled out when someone actually does die. From time to time, such stories are updated and then stored away for future use. Apparently, in the updating process the Bloomberg story wound up going briefly public.

9. Hacker faces plane ride to US court: The European Court of Human Rights will not hear U.K. hacker Gary McKinnon's appeal that he not be extradited to the U.S. McKinnon's attorney plans one more appeal, this one to the U.K. Home Secretary, on medical grounds because McKinnon was recently diagnosed with Asperger syndrome, a neurological disorder. He is accused of hacking into computers belonging to NASA and the U.S. military in 2001 and was indicted in 2002. U.K. police arrested him in 2005, and his extradition was first approved by the government there in 2006, but he has been fighting that move since.

10. Open source: What you should learn from the French: When it comes to adopting and promoting open-source software, the French government has been a leader for years. It has been promoting open source in government and education for years, and it is now weighing providing tax incentives to further stimulate open-source development. The big lesson from all this? Everyone prospers when working together under a single, shared technology vision.

Oracle's technical forums have been racked with performance issues all week since the vendor upgraded the system.

Forums.oracle.com underwent a "long, long overdue" upgrade last weekend to Jive Forums 5.5, according to a blog post by Justin Kestelyn, editor in chief of Oracle Technology Network.

But apparently, some Oracle users have had to wait a long, long time to access the system, receiving error messages and experiencing slow performance overall.

The situation has users who did manage to get into the forums sounding off in colorful fashion.

"I do not care whether or not this forum has loads of funky new features -- if no one can get to the site and/or post anything, what's the point?," wrote one poster, "ATD," on Thursday.

"I would also like to register my disgust at what's been happening for several days and my sheer disappointment that Oracle, of all companies, would allow an application to go live without thorough testing or, if it was thoroughly tested in UAT, without rolling back immediately when it was obvious that there were problems in the production environment," ATD added.

Oracle teams have been scrambling to resolve the issues all week, according to Kestelyn, and uptime reached 80 percent by Wednesday, compared to 7 percent on Monday.

"Uptime is still not where it should be of course; forums.oracle.com is business-critical for a lot of folks (as well as for Oracle), and I'm glad they consider it so," he wrote.

"We made a conscious decision early in this process to stick with the upgrade; to fight through the problems instead of run from them," he added. "Regardless, I do want to apologize for the downtime you've suffered through thus far."

It is possible the company will change course platform-wise, he said. "Stability is our top priority - much more so than features. If we have to trade the latter for the former, we will."

Open-source middleware maker Continuent has launched a database scale-out stack called Tungsten, which supports open-source databases like MySQL as well as proprietary ones from the likes of Oracle.

On Thursday, the company published code for Tungsten Replicator, a master-slave replication tool for MySQL, wrote Continuent CTO Robert Hodges in a blog post. Master-slave replication sees a "master" database sync up with a number of "slaves," allowing a workload to be scaled out.

"We started with master/slave replication on MySQL for a very simple reason: We know it well. And we know that while MySQL replication has many wonderful features like simple set-up, it also has many deficiencies that have persisted for a long time," Hodges wrote. Support for Oracle, PostgreSQL, and "many other databases" will follow, he added.

"The code is in the early stages but will mature very rapidly," he added. "We are looking forward to creating something that brings powerful replication within the reach of every database user."

Tungsten Replicator is part of the overall Tungsten stack.

The stack's capabilities include a failure protection function that keeps extra database replicas in the event the master fails and can automatically promote a slave to master status when needed. It also enables users to maintain and replicate database copies at a number of locations to aid disaster recovery, according to a statement.

The Tungsten project's site is located at community.continuent.com.

Continuent isn't trying to supplant high-end products like Oracle Real Application Clusters (RAC), 451 Group analyst Matthew Aslett said.

It instead hopes to provide "a potential incremental scale-out offering for customers using low-end databases and hardware that either can't afford or don't want to buy into the whole Oracle RAC architecture," he said.

"This is an interesting long-term opportunity, but in the near-term the most significant opportunities for Tungsten probably lie in improving the replication and high availability features for MySQL," Aslett added.

Mini-laptops are among the hottest new products this year and with the back-to-school sales season upon us, I created a list of items to help you choose the right one.

The devices, which are becoming popularly known as netbooks, or my favorite term, "laptots," have caught on because they offer people a mobile, easy way to wirelessly access the Web.

[ For more on products in the hot mini-notebook category, check out our hands-on looks at Asus' Eee PC 901 and 1000, the Cloudbook Max netbook, Elitegroup's G10IL mini-laptop, MSI's Wind low-cost laptop, Giga-byte's M912X mini-laptop, HP's Mini-Note netbook and Acer's Aspire one. ]

They come with 7-inch to 10-inch LCD screens and are about half to two-thirds the size of a mainstream laptop. They weigh around 1 kilogram (2.2 lbs) each, carry batteries that last up to 8 hours and generally cost between $199 and $699.

I've written several netbook reviews and after some consideration, offer these tips for your first netbook.

1. Know what you want to use it for and how much you're willing to spend.

This is a cliche in reviews and doesn't tell you much but it's actually very important. What do you want this for? Do you want a lightweight device for easy Internet access? Or are you really looking for a full-featured laptop computer? Don't buy a netbook if you're really looking for a laptop, it would be a mistake.

To ensure longer battery life, some key components on a netbook, such as the microprocessor, are far less powerful than common laptops. That's why they're good for surfing the Internet, doing homework on a word processing program, working on spreadsheets or for presentations and other Office-like work.

Anyone looking for a gaming laptop or one for video-editing or other multimedia work should shop for true laptops, not netbooks.

2. Buy a netbook with an 8.9-inch screen or larger.

I tried out an Eee PC with a 7-inch screen and the annoying part is not being able to see an entire Web page because the screen is too small.

That's less of a problem on the slightly larger-sized screens and in the 8.9-inch screen size, the weight and size of the netbook is nearly the same as devices with 7-inch screens.

3. Make sure you get a 6-cell battery for your netbook, although you may have to pay $50 more and the device will weigh more.

Most companies are offering netbooks with 3-cell batteries as the standard, but that doesn't offer a whole lot of run time, just 2 to 3 hours. A 6-cell battery doubles that, and in some devices designed around a 6-cell battery, such as Asustek Computer's Eee PC 1000 and Eee PC 901, you can get up to 8 hours.

In a mobile device, battery life is vital. You don't want to always be looking around for plugs, nor fighting over the last one.

Most vendors are now following Asustek's lead with 6-cell batteries. Micro-Star International recently announced a line of Wind netbooks with six-cell batteries, and Acer recently put out a formal version of its Aspire one with a six-cell battery, and larger HDD to boot.

Vendors generally offer six-cell batteries for all models. But most devices come standard with a three-cell or four-cell battery, so if you want a six-cell then you have to ask for it, and expect to pay a bit more.

Another benefit of the larger battery is that it props up the back of the device, putting it on a slight angle that makes typing easier. Keypads on netbooks are smaller than normal keypads, and comfortable typing was one area I was not willing to compromise on.

4. Try out the keypad and make sure it's right for you.

None of the devices I tested had a better typing pad on a cheaper netbook than Intel's ClassMate PC, which has a keypad far smaller than the Eee PC 1000. Keys on the ClassMate PC's keyboard are raised and there is a lot of space between them, making them easy to find by touch.

By contrast, the Eee PCs, Wind and Elitegroup Computer Systems' G10IL designed their keypads with flat keys and little or no space between keys because, I was told by Elitegroup staff, it makes them look nice.

The trouble is, it also makes typing more difficult.

I really liked the keypads on Acer's Aspire one and Everex's CloudBook Max , but the best keypad was on Hewlett-Packard's Mini-Note.

5. Software: see what it comes with and consider trying the Linux OS.

There are two lessons on software.

First, some vendors have skimped on including software in their netbooks on the pretense that users can download a lot of free software on the Internet. That's true, but it's a bogus excuse. Who wants to spend time downloading when many netbook makers have added lots of software so users can play with their new netbook right away?

Asustek included a lot of useful software on its Eee PCs 1000, 1000H and 901, as has Acer, which also added a nice opening screen that boots up in just 12 seconds.

Second, it may be time to the give the Linux OS a try.

The Acer opening screen I just referred to is based on Linux, and the Aspire one comes with the Linpus Linux Lite OS, which is very user friendly. I've used Windows for most of my life but switching to Linux to try out the Aspire one was smooth and easy.

Most of the netbooks I tested with Linux OSs booted up far faster than Windows XP or Windows Vista (I would not buy a netbook with Vista, it's just too slow).

There are also free Linux-based word processing programs, spreadsheets etc. available on the Internet such as Open Office , Google Pack, which includes Sun's StarOffice or Web-based software such as Google Apps.

Of course, it would be nice to see a Web site devoted to netbooks, with software specifically designed for low-power devices and smaller screens. Netbookdownload.com, anyone?

6. Price: if it costs more than $500, start looking at a regular notebook computer.

Companies have started promoting a wide range of netbooks at ever higher prices, but once you pass $500, netbooks start to compete with laptops, and a laptop will almost always give you more value for your money in that case.

Laptop computers have far more powerful microprocessors and other components than netbooks, and sport DVD drives. There are no DVD drives on netbooks.

If size and weight are your main concerns, there are plenty of small, full-featured laptops, including the Sony Vaio VGN-TZ340, Lenovo Ideapad U110-23042BU, and of course, Apple's lightweight MacBook Air.

7. Look around at what's available.

There were a lot of devices that impressed me and that are worth considering.

Giga-byte's M912, is the netbook that has by far the coolest technology on board with its touchscreen. The screen can also swivel around so you can show someone else what you're working on or looking at on the Net.

But I was quoted a price of NT$19,900 (US$632) for the device, and since I'm not really sure how much I'd use the touchscreen, I figured it wasn't right for me.

I almost decided on one of the netbooks with the bigger, 10-inch screens. My top choices were Asustek's Eee PC 1000 with the Xandros Linux OS and a 40GB solid state drive (SSD) for storage and six-cell battery, or Micro-Star International's Wind with a six-cell battery.

Both devices are very nice to use but were a little bigger and more expensive than what I was looking for. Size is important to consider in terms of weight. Ten inch screens, hard disk drives (HDDs) and 6-cell batteries add a lot of extra weight to a netbook.

All of the netbooks I tried out include wireless Internet access through Wi-Fi 802.11b/g, but only Asustek's Eee PCs 1000, 1000H and 901 offered speedier 802.11b/g/n as of this writing.

The CloudBook Max will be sold with subscriptions for WiMax wireless networking, and some netbooks will also be sold with built-in 3G modules so mobile phone service providers can offer them with 3G (third generation telecommunications) contracts, so people can access the Internet from anywhere on their mobile phone network.

People can also buy add-on 3G (third generation telephony) or WiMax cards for any netbook.

8. And finally, the best netbook available is....

I tested several different netbooks and published reviews on them all, and after trying out some pretty cool devices, I decided to buy the one that's right for me: Acer's Aspire one.

Based on the criteria above, here's why:

I already have a laptop PC, so I don't need a powerful netbook. I just wanted a smaller, lighter device easier to carry around that I can use to surf the Web and write outside my office.

The Aspire one comes with an 8.9-inch screen and a three-cell battery, standard, but I will pay a little more for a six-cell battery. I get stranded in airports sometimes, often take trains, and simply like to sip my coffee very slowly. I need a long lasting battery.

The keypad on the device is quite comfortable, and the software it comes with is easy to use, especially the Linpus Linux Lite OS.

The price sealed my decision.

Last Friday, Acer slashed prices on three Aspire one models in the U.S., to $399 for an Aspire one with Windows XP, a 160GB HDD (hard disk drive) and six-cell battery. An Aspire one with Windows XP, a 120GB HDD and three-cell battery costs just $349, and a similar device running on Linpus Linux Lite is just $329.

I plan to buy the $329 Linux-based Aspire one, which has an 8.9-inch screen, a 1.6GHz Intel Atom microprocessor, 512MB of DRAM and 8GB of flash memory storage and a three-cell battery. I'll add more DRAM and buy an additional flash card, as well as trade up to a six-cell battery, which will likely raise the price to around $420, in all.

Demand for Intel's Atom processor is strong, with computer makers clamoring for more chips to plug into the small, portable laptops called netbooks, but the chips remain in short supply. The problem isn't that Intel can't make enough of the silicon chips -- the company can, and it is -- but availability remains stymied by a testing bottleneck that prevents the chip maker from meeting demand.

This bottleneck, first highlighted in a July conference call by Intel CFO Stacy Smith, exists because Intel underestimated the level of end-user demand for the chips found in netbooks. The shortage of Atom chips is so severe that Asustek Computer decided to use a much older Intel chip, the 900MHz Celeron M 353, in two models of its popular Eee PC.

[ Find out more about Asustek's plans for Eee PC netbooks. ]

There's no quick fix. Intel can't easily take away capacity from other processors to handle the higher Atom demand. Atom processors are cheaper than other Intel chips and priority in the testing process goes to more expensive models that command higher average selling prices (ASPs).

"It would not be fiscally prudent to take capacity away from Core processors, with a US$100-ish ASP, to service Atom, which have a $25-ish ASP," wrote Dean McCarron, president of Mercury Research, in an e-mail.

Underscoring the fast-rising pace of demand for Atom, McCarron repeatedly revised his own shipment forecasts for the chip upwards, doubling them every six weeks since January.

One of Atom's advantages is its small size. Intel can cram 2,500 of them on the 300-millimeter silicon wafers it uses to make chips, helping to keep unit production costs low. But testing and assembling raw silicon into finished chips is a labor-intensive process. That's one reason Intel can't easily increase testing capacity.

"Capacity needed to be added, and that can only be done so fast as one has to buy equipment, install it and set up the appropriate factory lines, etc.," McCarron wrote.

Responding to a request for comment about the testing bottleneck, an Intel spokesman confirmed the testing constraint that has limited Atom availability remains, but did not say when the bottleneck would be eased.

Depending on end-user demand for various Intel chips, it's possible the bottleneck may not completely disappear until next year, when Intel completes construction on a $1 billion test and assembly facility in Vietnam. That plant, which will be Intel's largest testing facility when completed, is expected to begin production next year.