Welcome news, considering that back in June, SIA was calling for chip sales to fall 21 percent.

“The new forecast is brighter than our earlier projections, reflecting an improving global economy,” SIA President George Scalise said in a statement. “Unit sales of key demand drivers–including PCs and cell phones, which together account for about 60% of semiconductor demand–have been stronger than previously predicted. We remain cautiously optimistic for the longer term. The current forecast is closely tied to projections of continuing improvement in the worldwide economy.”

“The worst is now behind us.”

– Intel CEO Paul Otellini, April 14, 2009

Looks like the worst is once again behind us. In remarks at the Intel Developer Forum on Tuesday, Intel (INTC) CEO Paul Otellini said the PC industry is headed for recovery, albeit slowly. Evidently, chip shipments are stablizing as PC shipments begin to pick up.

“This is an environment where we have had the worst recession in 70 years,” Otellini said. “The market is poised for a resurgence and we will see how 2010 plays out.”

And what, exactly, does that mean? Otellini says that he “personally” is betting that the PC industry sales volume will at least match what we saw in 2008. They’ll wind up “flat to slightly up,” he said.

Analysts surveyed by Thomson Reuters expected Intel (INTC) to report revenue of $7.3 billion and a profit of eight cents per share. Instead the company reported revenue of $8 billion and non-GAAP profits of 18 cents (PDF). And it predicted third-quarter revenue above Wall Street’s expectations.

In a statement, CEO Paul Otellini said the results “reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half.”

Now admittedly, Intel did post earnings of 28 cents a share in the same period last year. So its fortunes clearly declined in the months that followed. That said, the company appears to be on the rebound after hitting the bottom Otellini declared back in April.

“Basically, very strong numbers for the quarter and guidance is in line with seasonal trends,” Collins Stewart analyst Ashok Kumar told Reuters.” It’s an extremely strong number given the macro economic backdrop. Despite those headwinds, the company delivered significant upside to both guidance as well as as expectations. The big unknown is whether it’s anything more than inventory replenishment.”

Intel shares are on the upswing on the news.

Sources tell The Wall Street Journal that the MID uses an ARM-based chip, runs Google’s (GOOG) Android operating system and has been in development since last year. It does not have cellphone capabilities. The device could arrive at market before the end of the year, distributed via cellular providers, though a person familiar with the company’s plans tells The Journal it might be delayed or even scrapped entirely.

For Dell (DELL), whose track record in adjacent electronics businesses is littered with the corpses of devices like the Ditty and Axim, venturing into the MID market might be a tad risky. To succeed the company would have to overcome its lack of software development experience and wireless technology and develop an appealing device. No easy task for a company whose recent smartphone design was rejected as too dull by wireless network operators.

Interestingly, the move follows an investment by another high-profile licensee: Intel. The chipmaker last week increased its own stake in Imagination to 14 16 percent, causing some to speculate that Intel (INTC) was prepping a takeover bid for the company. After all, Intel uses PowerVR in its Atom platform, which is crucial to its success on the mobile phone market.

Could these dueling investments set the stage for a takeover battle for the company? It’s certainly possible, but Seymour Pierce analyst Ian Robertson says it’s unlikely.

“Apple and Intel are investors not buyers,” Robertson said in a research note. “We do not expect either Intel or Apple to go beyond 15-20 percent in the short to medium term and we would be very surprised indeed if they were to attempt to buy Imagination. We note that both Apple and Intel have the resources to swallow up the company without chewing. We remind investors that Intel has a long history of taking and holding significant stakes in companies that it has seen as important to its further success–notably Micron and RAMBUS where its investment was not necessarily a guarantee of success for these companies.”

“Between indications from our component contacts in Asia, recent patents relating to multi-touch sensitivity for more complex computing devices, comments from Tim Cook on the April 22nd conference call, and Apple’s acquisition of P.A. Semi along with other recent chip-related hires, it is increasingly clear that Apple is investing more in its mobile computing franchise,” he writes. “Specifically, we expect this to result in a larger (7″-10″) touchscreen tablet that will launch in 1H CY10. Additionally, Apple’s consistent message that it refuses to launch a ‘cheap’ portable netbook, and its desire to differentiate itself in a maturing market before it’s too late, plus its gradual addition of multi-touch technology to all of its core products (iPhones, iPods and Macs) leads us to conclude this product will be a touchscreen tablet.”

Munster theorizes that the device will use a third version of Mac OS X to offer a sort of middle ground between the iPod touch and the MacBook. “The device’s OS could bear a close resemblance to Apple’s iPhone OS and run App Store apps,” he wrote. “Key apps, like Safari and Mail, could make use of the larger screen resolution, making Apple’s tablet appealing for more extended use, but the company could continue to leverage its primary asset in mobile computing, the App Store, in this scenario.”

The design of that OS, however, has been time-consuming and will keep the device from market until the first half of next year. “We expect the development of such an OS to be underway currently,” Munster says, “but its complexity, along with our conversations with a key company in the mobile space, leads us to believe it will not launch until CY10.”

[Image Credit: MacBlogz]

You know things are bad at AMD when the company’s schadenfreude over Intel’s European legal woes spills over into its brand messaging. Surf over to AMD’s Web site this morning and you’ll find foremost on its homepage not a message about Fusion, its next-generation microprocessor design, or branding for its various chips, but a gigantic European Union flag flying over this text:

“European Commission finds Intel guilty of breaking antitrust laws, harming consumers.”

Click through and you’ll find an entire subsite celebrating the EC’s finding–a shrine of court documents, press releases and industry quotes. “European Commission Reveals the Truth About Intel,” the page shouts, cataloging AMD’s grievances against the company. And while that’s apparently the case, AMD’s response reveals a bit of truth about AMD. Gloating over a legal victory is one thing, but building a branding campaign around it is another one entirely. Moral superiority is wonderful, but it’s not going to win any battles in the marketplace.

For AMD (AMD) to beat Intel (INTC) at its own game, it must beat Intel at its own game. “Imagine a world where the world’s most important information technology only comes from one place,” AMD President and CEO Dirk Meyer recently told BusinessWeek. “Nobody wants to live in that world.” No, I suppose not. But if we’re going to live in the better one the Meyer is hinting at, AMD has got to build it. Talking about it as your company continues to struggle toward profitability after more than two years of losses, isn’t going to cut it.

Another ugly SIA metric in a parade of them, though optimists will say that slight uptick in March is a sign that the industry has finally found a bottom from which to scramble upward. “The modest sequential rebound in worldwide sales in March suggests that demand has stabilized somewhat, albeit at substantially lower levels than last year,” SIA President George Scalise said in the report. “While all major product sectors showed month-on-month growth, there continues to be limited visibility in end markets. There are some bright spots such as ‘smart phones’ and ‘netbook’ PCs, but there are no clear signs of early firming of demand in other major end markets such as automotive, corporate information technology, and consumer electronics.”

So, perhaps we’re not on our way to the depths plumbed back in 2001-2002. And perhaps we are. The SIA doesn’t quite seem to know.

Also making the rounds today are reports claiming iPhone 3.0 will support on-board video editing. Seems there are some resources in the latest beta of the OS suggesting that video capture and manipulation will figure large in the next device–things like “UIMovie Scrubber Editing Right,” “UIMovieScrubberMaskLeft” and whatnot. Now, while these resources could be pointing to something else entirely, it seems plausible that they are referencing some sort of video tool (iMovie Mobile? iMovie Light? iMoviePhone?)–particularly when considered with the MobileMe “Publish Video” feature also found concealed in the 3.0 beta. That said, no mention of video editing was made during Apple’s recent iPhone 3.0 event. Perhaps Apple (AAPL) hopes to keep it under wraps until the device’s official debut. Or perhaps there’s nothing to keep under wraps in the first place.

The new machine is largely as predicted. It boasts Apple’s new unibody chassis and a glass touch trackpad. At 6.6 pounds, it’s the world’s lightest notebook. It has a hi-res backlit display. “The best display we’ve ever shipped in a notebook,” says Schiller, with a 60 percent greater color gamut than other machines.

The new Pro has the same glossy screen as its brethren, but thankfully, it’s available with a $50 anti-glare option as well.

Finally, it incorporates a new battery pack that boasts an eight-hour charge life and 1000 recharges, three times the industry standard. It’s not the zinc battery that some observers were expecting, but very innovative nonetheless. There’s a chip in the battery that intelligently monitors an “adaptive charge,” whatever that means. Bottom line: three hours more battery life than previous machines. According to Apple (AAPL), the battery should last five years, which will result in fewer batteries and landfills and makes this 17-inch model a greener machine.

The new Pro 17-inch MacBook starts at $2799 and will ship at the end of the month.

Sounds intriguing, yeah? So what it is it?

Chowdhry hasn’t the faintest idea. But he speculates that it will involve chips developed by P.A. Semi, the boutique semiconductor design company Apple acquired last April. A clearer picture of what’s in store for us will emerge in early 2009 with a series of new Apple patent filings says Chowdhry, who contends that a P.A. Semi chip has also been designed into the third-generation iPhone–which will boast vastly improved performance and battery life over its predecessor.

There’s a lot of emphasis at this unveiling on environmental concerns, reducing the footprint for manufacturing the new notebooks.

Says Ives: “We’ve refined every detail in service of the user.”

Steve Jobs announces that it’s time for Q&A, but with a caveat. No questions about the economy, he says, or Apple’s financial performance because there will be an earnings report next week. And no questions about “my health,” he adds, as a new slide appears on the big screen above him showing his blood pressure.

As the audience laughs, Jobs welcomes Apple COO Tim Cook and Phil Schiller, senior vice president of worldwide marketing, to the stage to take questions from the audience.

Apple (AAPL) does not have an exclusive on the new Nvidia chip, but it will be first to market. “And we’re buying a lot of chips.”

Why no Blu-ray? “Blu-ray is just a bag of hurts,” says Jobs. Apple is waiting things out before “passing that cost burden on to consumers.”

Jobs expects the redesigns to trigger a refresh cycle in both the MacBook and MacBook Pro.

Someone asks why there are no matte screens. Answer: “The vast majority of our customers prefer a glossy finish.”

The 17-inch MacBook Pro is still available, but it has not been refreshed like the other models.

Final question: “Do touchscreens make sense on laptops?” Jobs’s reply: “We’ve experimented with them, but they don’t make a lot of sense to us.”

So no tablet.

And with that, the event is over.