Sun's China Boom?

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Shares of Sun Microsystems (Nasdaq: SUNW) jumped as much as 5% in morning trading on news that China would make Sun's Java Desktop System the basis for a national standard.

The Chinese government has backed the China Standard Software Co. (CSSC) consortium of tech companies to create a standard for nationwide employment, and Sun says it is CSSC's preferred partner. According to Sun, CSSC will license Sun's Java Desktop System as the basis of its own "open standards desktop solution" and ultimately install 200 million copies through the country, beginning at the end of this year at the rate of 500,00 to 1 million a year.

That's a lotta users, but will they bring mucho license fees? Observers note that Sun's competitor Microsoft (Nasdaq: MSFT) is a fierce presence in Asia through at least one less-than-optimal way: cheap to free contraband copies of Microsoft software. While the Chinese government presumably has to choose a commercial partner for so visible a project and pay the market rate, Sun must have offered a price knowing the real-world competition -- all of which should counsel investors not to count Sun's profits before they appear.

The China development followed midday news that Sun would join with perennial No. 2 chip maker Advanced Micro Devices (NYSE: AMD) to not only build and market products using AMD's new Opteron 64-bit chip but "optimize" Sun's Solaris operating system and Java Desktop System for performance with the Opteron. And in a marriage of two huge Silicon Valley PR machines -- Sun refuses to let the sun set on a day with a company press release or three -- Sun's statement contained Oracle (Nasdaq: ORCL) CEO Larry Ellison's ringing endorsement and promise that "soon Oracle will run on AMD Opteron under both Solaris and Linux."

Is the sun shining on Sun from the Far East? Join in on our always lively Sun Microsystems discussion board .