Hewlett-Packard has launched its next generation of thin-client computing, complete with a new chip. The t5720, which uses AMD chips, replacing those from Transmeta, which no longer makes chips.

The t5720 thin client will be 10 percent faster than its predecessor, the t5710, and still use less wattage, said Keith Martin, product manager for HP thin clients. It achieves that by using the AMD Geode NX 1500 processor, a 1GHz chip based on the mobile Athlon. The t5720 also has more memory, with up to 512M bytes of flash memory and 512MB of DDR (double data rate) RAM. It runs the Windows XP Embedded operating system.

The product will be the high-performance model in HP's line of thin-client computers, alongside the price-sensitive t5125 for Linux systems, and the business-class t5520 for Windows CE 5.0 and t5525 for Linux.

HP sees strong growth potential for thin clients. In 2005, 2.6 million thin clients were shipped and unit shipments are forecast to reach 4.5 million this year, Martin said.

Thin clients could have strong growth in many sectors, said Mark Margevicius, research director at Gartner Research in Stamford, Connecticut.

"Customers are faced with an aging PC installed base with costly upgrades scheduled. Now they look at thin clients and see faster networks, better security and lower management costs. I wouldn't call it the perfect storm, but it's the perfect opportunity," he said.

Another company that sees opportunity in thin clients is Wyse Technology which has announced a partnership with AT&T's Business Services Division. AT&T will offer its business customers a bundle of Wyse thin-client computers and an AT&T array of security and continuity services, data-hosting services, and data and IP (Internet Protocol) networks including VPN (virtual private networks) and VOIP (voice over IP) telephony.

Thin clients today have just a 5 percent share of the corporate desktop market, but that will quickly grow beyond 10 percent, said Wyse CEO John Kish. Because Wyse has a 40 percent share of the $600 million thin-client market, it could claim a large portion growth, Kish said.

Demand for thin-client computers is growing because companies want to drive down the cost of workers' computers. Since a thin client has no moving parts like fans and hard drives, it will last five to 10 years longer than an equivalent PC, he said.

Ten years ago, users had valid complaints about how slowly thin clients pulled data off a central server.

"The keys to that castle are in software, not hardware," Kish said. "In a thin client, you don't need a 2GHz processor because there's not much processing going on; the network does the heavy lifting."