Phoenix KK Japanese subsidiary. In addition, the offices in Taipei, and Europe were expanded in size. In 1994, Phoenix acquired Guildford, Surrey, UK-based DIP Research Ltd. and continued to expand European operations, who had previously developed the DIP DOS operating system for the DIP Pocket PC aka Atari Portfolio in 1989. In 1996, Phoenix acquired Virtual Chips, Inc., a maker of synthesizable cores for PC peripherals, and Mountain View, California-based Award Software in 1998. Due to these expansions, Phoenix reduced its global work force by 5% by ending 38 jobs. 2001–2003 Phoenix continued to grow steadily from the late 1990s, and saw a significant increase in revenues from the Y2K product refreshes in the PC industry. However, by mid-2001, the PC industry suffered another downturn, and Phoenix was forced to reduce the less profitable product lines, such as the IA-64 effort, and close a number of redundant offices. Phoenix again focused on the core BIOS business for the next few years. During late 2002 and 2003, Phoenix began to develop specialized firmware-based applications. These applications often had components embedded in the BIOS that allowed them to function in damaged PC systems. These included security applications for password hiding and authentication, PC backup and recovery applications, and basic diagnostic applications. Several applications were obtained through complete acquisitions of other companies, such as the SPEKE technology from Integrity Sciences, or the browser technology from Ravisent. The PC BIOS business continued its steady, but slow, growth despite a rapidly declining unit price. The Award product line was focused on the low-margin, high volume Desktop product line, while the Phoenix TrustedCore BIOS was primarily successful in the high-end PC systems, and Servers. The revenues from the BIOS business continued to provide the capital to invest further in the applications business. 2005–2008 By late 2005, it became clear that the BIOS revenues could not sustain the losses incurred by the applications business. The BIOS revenue stream was heavily leveraged through fully paid-up licenses, and by early 2006 this business model was no longer sustainable. Phoenix announced some of the largest losses in the company history, and went through another consolidation cycle. Several offices were closed and over 70% of the employees were laid off. By late 2006, after senior management changes, the company refocused on the PC BIOS business and the couple of potentially profitable applications. In September, the company named Woodson "Woody" Hobbs as