Iomega’s Rev drives compete with portable hard drives from Seagate and Western Digital; EMC hopes to buy the company and turbocharge the brand. Image: Iomega

What happened to Iomega (IOM)?

It was a gravity-defying technology stock during its best run a decade ago. At its peak in 1996, the company’s nearly $6 billion valuation meant many investors were betting it would be the future of digital storage.

Iomega seemed to be at the right place at the right time; broadband connections and music downloads were not yet common, and few tech companies recognized that storage would be a growth market. Meanwhile Iomega’s proprietary Zip disks and Zip drives provided the capacity of a computer hard drive and the portability of a floppy disk, making it a snap to move chunky files like digital images or huge spreadsheets from one PC to another.

Microsoft stock has crept higher since it sank three months ago on word of its Yahoo bid.

Can Microsoft do it again?

Late last year, investors and analysts were wringing their hands over a tech stock collapse. With the economy starting to slow, investors punished a slew of big techs including Microsoft (MSFT), IBM (IBM) and Hewlett-Packard (HPQ). Not even hot-growth companies like Apple (AAPL) and Research in Motion (RIMM) were spared.

Then Microsoft reported earnings in January, and the sun came out: $6.5 billion in profit for the holiday quarter on sales of $16.4 billion. And best of all, the forecast was bright. “We actually feel very optimistic,” said Microsoft Chief Financial Officer Chris Liddell. “The next six months we feel very good about.”

The MacBook Air was a top-seller for Apple last quarter, helping to deliver the equivalent of a second holiday season. Image: Apple

iPod growth has stalled. The iPhone is basically doing as expected. So in Apple’s financial results, the real surprise was the MacBook Air.

This time, gadgets didn’t save the day for Apple (AAPL). Even after adding a pink iPod nano to its lineup in time for Valentine’s Day, the company sold just 100,000 more iPods in the first three months of this year than it did a year before. iPhone sales came in 26 percent (or 600,000 units) lower than the holiday quarter, which isn’t a great sign.

Hard drives and flash memory are increasingly vying for share in the storage market. Image: Sandisk, Samsung

Hard drive maker Seagate (STX) filed a patent suit against flash drive maker STEC (STEC) in federal court on Monday, firing the first shot in a new intellectual property battle between hard drive makers and providers of flash storage technology.

Seagate, the world’s largest hard drive maker, claims that STEC has violated four of its patents covering the way a storage device communicates with a computer. The suit was filed in the Northern District of California.

STEC said it believes Seagate’s lawsuit is “completely without merit and primarily motivated by competitive concerns rather than a desire to protect its intellectual property.” The company said it began building flash drives before Seagate won its patents. (STEC’s full statement is below.)

The HP Mini laptop is aimed at the education market, but it could appeal to road warriors as well. Image: HP

Pick up HP’s new $500 mini-laptop, and the first thing you notice is the aluminum casing. Though the thing weighs only about 2.5 pounds, what’s striking is how its sleek skin makes it feel solid and professional – not at all what you’d expect from a budget PC.

I’m in a suite at the Palace Hotel in San Francisco getting a first look at Hewlett-Packard’s (HPQ) latest machine, which the company hopes will help it steal share from Dell (DELL) and Apple (AAPL) in the education market. (Each of the three companies has just under 20 percent of the worldwide market.) HP’s development team, I’m told, consulted educators as they designed the 2133 Mini-Note, and as I turn the laptop over in my hands that comes through in little details.

Michael Dell is still struggling to reclaim his company’s former glory, and the latest cutbacks show he still has a long way to go.

Dell (DELL) said Monday that it will close an Austin, Texas plant that makes desktop PCs. It’s just the latest step in a plan management laid out nearly a year ago, in which the company plans to shed 8,300 workers and save $3 billion in costs. The remarkable thing about Dell’s announcement isn’t the simple shuttering of a U.S. manufacturing facility – that sort of thing is happening across the country every day. It’s how precipitously Dell has fallen.

Microsoft Surface is a tabletop computer that’s controlled by physical touch instead of a mouse or keyboard. Image: Microsoft

Microsoft’s tabletop computer could appear in homes in three years or less, the executive in charge of its development said this week.

Since unveiling the Microsoft Surface product last year, the company has gotten plenty of feedback from businesses and enthusiasts who want to get their hands on the technology, said Tom Gibbons, corporate vice president of Microsoft’s (MSFT) Specialized Devices and Applications business. And Gibbons said he feels confident that the touch-based computer could be affordable enough for consumers in three years or less. “In the three-year time window, we absolutely see how to get there,” Gibbons said. “If we can beat that, we’ll try to beat that.”

Surface is a computer built into a coffee table, and its 30-inch screen is controlled by touch rather than by a mouse or keyboard. (The complex manufacturing, of course, makes it expensive — the commercial version will be priced between $5,000 and $10,000) Though the concept is similar to Apple’s (AAPL) touchscreen iPhone, the implementation of the technology is quite different. Surface works using digital cameras under the glass, which track movements above.

Lenovo’s critically acclaimed ThinkPad X300 laptop does without a hard drive. Image: Lenovo

While munching on a reuben at Birk’s, a steakhouse in Silicon Valley, Seagate (STX) CEO Bill Watkins is explaining why he’s not too worried about a these trendy new laptops that have everything but a hard drive.

On the surface, this would seem to be a big problem. Seagate, after all, is the world’s largest hard drive maker with expected sales of more than $3 billion this quarter – so Watkins likes to see his wares go into more gadgets, not fewer. It’s easy to see why he tends not to favor devices like Lenovo’s sleek ThinkPad X300, which is winning raves for its light weight and silent operation, and its 64-gigabyte flash storage drive.

HP Chief Strategy and Technology Officer Shane Robison says the reorganization of HP Labs should speed innovation and eventually boost profit margins. Image: HP

Now that it’s an undisputed turnaround story, Hewlett-Packard (HPQ) is looking for ways to fuel long-term growth. An important piece of its plan is HP Labs, a group of 600 top-flight researchers who work to develop breakthrough technologies. To better position HP Labs as a growth engine, the company announced Thursday that it will refocus its efforts on five areas: Information explosion, dynamic cloud services, content transformation, intelligent infrastructure and sustainability. (Earlier: Turning an idea farm into a hit factory)

I sat down with HP strategy and technology chief Shane Robison to talk about the research shift, and what it means for the company. Below is an edited transcript of our chat.

Memory prices are bruising profit margins, but CEO Paul Otellini says the chip giant can still thrive.

CEO Paul Otellini spent 2007 restoring investor faith in Intel; thanks to a slow economy and eroding memory prices, he’s got more work to do. Image: Intel

Facing flagging profit margins and a skeptical Wall Street, Intel (INTC) CEO Paul Otellini hosted investors at the company’s Silicon Valley headquarters Wednesday. His message: Despite a weak U.S. economy and an ugly memory market, the Internet boom will supercharge revenues at the world’s largest chipmaker.

“We essentially think we can triple the market for our products,” Otellini told a gathering of financial analysts. “And this isn’t assuming that we have a full run of every market; it’s assuming we have a moderate view of success.”

But Intel’s growth story is a tougher sell today than it was a few months ago, which helps explain why the company took the unusual step of hosting investors at its Santa Clara headquarters instead of doing the event in New York as usual. And the tough sell is not just an issue for Intel; since November, when it became clear that the U.S. subprime mortgage crisis could tip the economy into recession, the tech industry in general has been hit hard. Stocks like Intel and Apple (AAPL) that were investor darlings in 2007 have suffered gut-wrenching losses; Intel has shed more than $35 billion in market capitalization, a quarter of its value, since December.