Intel designed its Classmate PC to help schoolchildren in its emerging markets, but its second-generation model, unveiled in Shanghai today, represents a shift in strategy.

Classmate 2 recognises the success of Asus’s eee machine in attracting the broader consumer market in both emerging and developed worlds to small, cheap laptops.

It may have happened faster than Intel and One Laptop Per Child anticipated. Both focused on developing-world education markets, but now are adjusting to making their designs more widely available.

Intel says they define a new category called “netbooks” of smaller wireless internet-enabled laptops with low power requirements and a low price tag.

Intel has high hopes that its Atom processor, launched this week and set to be included in Classmate in the third quarter, could gain significant market share in new categories of “internet in your pocket” devices.

The Classmate 2 has a more sophisticated and rugged design, along with better battery life.  Intel sets the specifications and design for the machine and its Taiwanese manufacturing partner ECS helps system suppliers with configurations.

Intel listed 17 suppliers of Classmate 2 in 14 countries, including the USA, Greece, Vietnam and Australia.

Tom Rampone, head of its Channel Platforms group told me some models should be priced below $300, but a price tag of around $350 would be more typical.

The original Classmate was not noted for its performance, suggesting its successor will have to up its game considerably to be a match for the speedy eee, which sells for $300 and higher.

ECS expects to double Classmate shipments this year, but only to 200,000 units from 100,000 in 2007.

 Despite what you may read, Google and other internet companies didn’t really get everything they wanted from the US spectrum auction that just ended - in fact, in many ways the status quo remains exactly what it was.

The auction “winners” were announced today (that word is in inverted commas because only time will tell whether they got a good deal or overpaid.) Google shareholders were at least able to breathe a sigh of relief that it was Verizon Wireless, not the search company, that had paid $4.74bn for the all-important C Block of spectrum. That is the block that the FCC, after cajoling by Google, subjected to “open access” provisions.

So Google will get the benefit of an open national network and greater broadband competition without paying a cent?

Not really. Google’s preferred outcome all along was for this rare auction of national spectrum to give rise to a new national competitor in the US broadband market - someone to help bring down prices and make sure there is enough competition to keep the “pipes” open. With Verizon and AT&T dominating the auction proceedings, the outcome looks very much like business as usual.

Nor is it at all clear what the open accees provisions will actually mean in practice. Verizon held an event in New York earlier this week to lay out its plans for letting any device onto its network, provided certain safeguards are met. In theory, this means consumers will be able to buy a handset incorporating Google’s new Android software, then go independently to Verizon and ask to connect to the network.

Yet Verizon said nothing at all this week about how much it would cost to do this (last time I spoke to CEO Lowell McAdam about that, he said these customers were likely to be charged based on the amount of bandwidth they use - not something most people will jump at.) Also, anyone going this route would miss out on the hefty operator-funded handset subsidies that US consumers have been taught to expect.

The US wireless market may indeed be opening up, but it will be a slow process.

 When Macromedia first tried to charge mobile phone companies for the privilege of carrying its Flash player for viewing video, even its own executives were surprised by their success. After all, the PC version of the player had always been free. That helped to attract a large number of eyeballs to the player, which in turn meant the company could sell software to creative types who wanted to produce content in Flash (that is the same business model behind Acrobat, the free PDF document reader supplied by Adobe, which went on to buy Macromedia.) Surprise, surprise: it turned out that mobile companies were actually prepared to pay for the player as well.

So when Steve Jobs bad-mouthed mobile Flash earlier this month it sounded very much like a heavy-handed attempt at public negotiation. The current version of the software is not up to scratch yet and won’t be appearing on the iPhone, according to the Apple boss (as my colleague Chris Nuttall wrote here last week, the lack of Flash is one reason third-party developers are sounding luke-warn about their new ability to write applications for the iPhone.) When I spoke to Gary Kovacs, Adobe’s vice president of mobile products, at the end of last week he was tight-lipped about relations with Apple but still managed to hint heavily that this was really about price rather than technical competence: negotiations with Apple are ongoing.

Strengthening Adobe’s negotiating hand will be the news today that even arch-enemy Microsoft is now prepared to pay for mobile Flash. Despite its own rival Silverlight software, Microsoft has signed a licence so that it can package the player with its own mobile software for hardware makers that don’t want to do the integration work themselves. Kovacs wouldn’t give a figure, but he confirmed that Microsoft will pay a per-player charge. With more than 500m Flash players already shipped inside mobile handsets and consumer electonics devices like the Wii and the PS3, this should further strengthen Adobe’s hand.

That makes the Apple/Adobe stand-off an early test of the iPhone’s market power. If Jobs can break the mold and get Flash for free, it will be a clear sign of how he intends to wield his new clout in the mobile world. That’s something that’s already making many in the technology and media industries sweat.

The Zeemote on first use seems to be a solution looking for a problem.

This separate joystick controller for playing games on mobile phones appeared an unnecessary peripheral to me – who wants to carry around something extra in their pocket just to play a few games on their phone, when the regular buttons on the handset work just as well?

I gave it to my nine-year-old son to play with and he concurred. There was nothing he could do with the joystick that he couldn’t do using the normal phone buttons. Even flying was just as easy on the phone.

However, I spoke to Beth Marcus, Zeemote’s chief executive, who provided a few reasons to justify the device, which will be demonstrated at next week’s Game Developers Conference.

Firstly, my son’s hands were a lot smaller than those in the Zeemote’s target demographic – 18 to 25 year-olds – where frustrations abound when a wrong key is pressed. Second, it’s a different decoupled sit-back experience compared to putting the phone in your face in Blackberry-prayer mode. Third, there are moves you can make with the Zeemote that can take you to the next level of a game, which are almost impossible on a regular handset keyboard - I’ll have to trust her on that one.

She expects the Zeemote, which features a thumbstick and four assignable buttons, to be available in the first half of the year for less than $50. It could also be bundled with games and/or a phone and calling plan.

The Zeemote could also find other uses as a remote control and a smoother browser of maps and web pages, but the focus is on games for now.

The chief executive created the first force-feedback joystick for PC games, but there are no rumble effects in the Zeemote, which pairs up with the phone as a Bluetooth device.

“That would have been an extra cost,” she said. “And there’s a motor in phones that can already add vibrations to games.”

These days, no big industry conference is complete without a good deal of public posturing over global warming, and the Mobile World Congress in Barcelona this week is no exception. Nokia, the world’s largest mobile handset maker, and China Mobile, the world’s largest operator, have both jumped on the eco-bandwagon.

Wang Jianzhou, the chief executive of China Mobile, told delegates that companies had to take responsibility for climate change. China Mobile itself is taking action by collecting old mobile handsets, building mobile base stations that run on solar and wind power, and buying low-energy equipment from suppliers. They clearly want to be seen to be doing their bit ahead of the Beijing Olympics.

Meanwhile Olli-Pekka Kallasvuo, CEO of Nokia, displayed a prototype phone made entirely from recycled materials such as tin cans, plastic bottles and old tyres. There is no hint of when, if ever, such a phone might be brought to market. But its an indication of what is possible, Mr Kallasvuo said.

Its very fashionable for companies to talk up the environment at the moment- without necessarily doing much. But these two mobile behemoths are of such a size that even first steps like these will have some impact.

Apple is not the only Silicon Valley company trying to shake up the mobile world with more graphically rich phones.

Nvidia, known best for its PC graphics cards, unveiled an applications processor at the Mobile World Congress today that enables 10 hours of high-definition video playback and 100 hours of audio on a phone.

The Santa Clara company says its APX 2500 is the world’s lowest power HD computer on a chip.

The processor is the fruit of its $357m PortalPlayer acquisition in November 2006. The chip company was picked up after it lost a key Apple order for its iPods.

“PortalPlayer was the technology behind the first five generations of the iPod – a system on a chip that decoded the audio with very low power use,” says Mike Rayfield, general manager of Nvidia’s mobile unit.

“We’ve combined that with our graphics processors for handheld devices to make application processors.”

Nvidia saw a trend where the modem parts of mobile phones were being separated from application processors, which were becoming more like computer processors, he added.

Mr Rayfield sees applications such as immersive 3D maps and users plugging their phones into hotel-room TVs to play two-hour movies stored on the handset.

Nvidia expects full production of the processor to be underway by mid-year and is pitching it at Windows Mobile devices. It says it allows handset makers to come up with a “Smartphone 2.0” that can challenge the iPhone’s graphical richness, with Windows Vista-like 3D-overlays and transparency possible in the display.

The way to achieve a certain mystique for a mobile product is to not attend trade shows like the Mobile World Congress. Last year Apple stayed away, but the iPhone was the word on everyone’s lips. This year Android is the new, much discussed, threat to the establishment and Google’s presence is minimal - especially as Andy Rubin, head of the Android project, had to suddenly race back to the US, cancelling planned demos of the software. Was it really an emergency calling him back - or is it just the new style of brandbuillding?

One man clearly immune to Steve Jobs’ famed "reality distortion field" is Ad Scheepbouwer, straight-talking CEO of KPN, the Dutch telecoms company. He decided that his iPhone was "pretty useless" so he gave it to his 20-year-old daughter. She didn’t rate it either. "She’s given it to her boyfriend," Mr Scheepbouwer told the FT. "He’s very happy with it, but it’s been three days so we’ll see how it ends."

Given that the iPhone isn’t yet officially available in the Netherlands (or any other country besides the US, UK, France and Germany) that’s surprisingly candid. KPN would like to sell the phone on the Dutch market and Apple has so far chosen to sell the iPhone tied to just one mobile operator in each country. But it probably also reflects what some pundits have said all along: Europeans generally expect to pay less and get more from their phones. There is some evidence for that with the news last month that the iPhone missed its sales target in the UK, where 02 has responded with better value calling plans.

Bring on the iPhone 2.0?

Palm Desert, California: Here at DEMO 08, we have two days of product launches by 77 companies unveiling new web tools and services, hardware, software and the latest in consumer electronics.

Products like the Roomba vacuum cleaner and Pleo the robot dinosaur were introduced at DEMO and the room here is packed with media and venture capitalists watching six-minute demos of the next big ideas.

Some highlights from the opening session:

Iterasi unveiled its "Notarize" web toolbar. This is bookmarking on steroids. Iterasi captures a complete web page when you click on its button. That means not just the link, but an image of the page and a full html version that will render just as you first saw it. This has become more difficult as sites have become increasingly complex with the use of Ajax, but search results pages and annotated maps can be saved as you created them. The page can also be tagged and filed to make it more findable.

LeapFrog, the educational toy company which has sold 30m of its LeapPad platforms worldwide and more than 70m LeapPad books, introduced its new Tag device.  The pen-like peripheral is aimed at helping four to eight-year-olds to read. Pressing on any word or object in Tag-enabled books makes the pen speak the word. It can also be connected to a PC to download words for new books and to upload information on the child’s reading, showing a parent how their child is progressing.

One of the irritations of current mobile phone browsers is that they lack the software capabilities to play video. Skyfire launched a browser for mobile phones at DEMO that can handle Flash, Ajax, Java and Quicktime elements in web pages. The bad news is that is still in private beta and only works on Windows Mobile devices currently. The presenters said users could also listen to last.fm music, and later showed me how other kinds of non-Flash-based internet radio like the BBC could be heard.

The storage company Fabrik showed off Joggle, which it described as "aggregation through virtualisation". Joggle, built on the Adobe Air platform, finds your content whether it is online or offline and presents it in a single view. Fabrik showed a window of thumbnail pictures that were stored on a combination of Flickr, a USB thumb drive and a MyDocuments folder. Content such as photos and music can be dragged into a slideshow creation tool that can then be served as a widget on a users’ blog or MySpace page.

SpeakLike showed an instant-messaging translation service. An English speaker typed in English in his chat window, but his words appeared translated into Spanish in the window of his Spanish friend. The reply in Spanish was translated back into English. SpeakLike also demo’d an English to Chinese conversation. The company uses a mixture of machine translation and human interpreters, which raises questions about how the business will scale and make money.

Finally, Notchup showed off a job recruitment service for people not looking for jobs. The idea is that people happy in their jobs but interested in listening to good offers are the most sought-after recruits. Companies can pay tens of thousands of dollars to headhunters to reach these people, but Notchup cuts out the middleman. Workers enter their CVs and use a calculator for their skills to set a price of say $500 that they expect to be paid to be interviewed. Companies contact them directly although the worker’s anonymity is initially preserved. Notchup says 50,000 people and 400 corporate clients have signed up in the past eight days.

Intel, which has been engaged in a battle royal with Advanced Micro Devices over whose chips go in high-end servers, is beginning to encounter a similar level of competition from a smaller rival at the other end of the scale.

VIA, based in Taiwan, is often forgotten as a player in the dominant "x86" market for PC microprocessors. It has never had more than 5 per cent market-share and is normally in the 1 to 2 per cent range, with Intel taking around 80 per cent and AMD the rest.

However, it seems to be a match for Intel in the niche segment largely ignored by AMD for low-powered computing.

Samsung has tried both VIA and Intel microprocessors in its Q1 ultra-mobile PC.  VIA is preferred in the 02 by  Silicon Valley’s OQO, which pioneered the category. A VIA processor is also powering the Everex CloudBook, which created a stir at the Consumer Electronics Show this month.

Intel is pushing a new category called Mobile Internet Devices or Mids and is expected to become more competitive when it introduces its low-power Silverthorne chip. More details of its capabilities are expected next month.

This week, VIA announced its next-generation Isaiah architecture, which it believes will keep it ahead of Intel, even after Silverthorne appears in the second quarter.

While Intel has switched from increasing speeds to decreasing power demands in its chip designs, VIA is going the other way.

Its strength has always been the extended battery life it permits through the low wattage of its microprocessors. With Isaiah, it says the power demands will be the same, but the Isaiah chip will perform two to four times better than its predecessor.

"Our chips are the best in the market for performance per watt, but the level of performance we can achieve with Isaiah means we can be more competitive in other segments," says Glenn Henry, president of Centaur Technology, a VIA subsidiary that designed the chip.

The performance boost could even make VIA a competitor for the microprocessor slot in full-sized PCs, he says, a move that would certainly get the attention of both Intel and AMD.