Want to know what's really hot at the Consumer Electronics Show in Las Vegas? Just crawl under your desk and touch one of the many black boxes plugged into the power strip.

Yup. It's probably warm. And therein may lie an opportunity, says analyst Andrew Huang of American Technology Research.

Come July 1, he notes, California, one of the world's largest markets for electronics, will require that that power supplies, which are really transformers, operate far more efficiently.

To meet those standards, manufacturers will have to use more analog chips in those boxes, Huang says. One company to watch:

Power Integrations

(POWI) - Get Report

, which supplies high-voltage analog integrated circuits used in power conversion.

The company had a tough spring on Wall Street, suffering four sell-side downgrades, including one by Huang, but it recovered nicely and ended the year 20% to the upside. (ATR does not have an investment-banking business.)

The new law hasn't gotten all that much attention. In fact, when asked if

Microsoft's

(MSFT) - Get Report

new Xbox 360 complied with it, a company spokeswoman had no idea. After a couple of hours of digging, she reported that Title 20 of the California Code of Regulations does not apply to the console.

That's a good thing, because the need to retool would have been yet another factor delaying Microsoft's shipments, a sensitive subject on Wall Street.

On Wednesday, Goldman Sachs analyst Rich Sherlund published a note saying he believes (the won't company release unit shipments) that Microsoft has delivered only about 1.3 million Xbox 360 consoles in the quarter vs. his earlier estimate of 1.5 million to 1.8 million units. The high-profile analyst backed $400 million out of his quarterly revenue estimate to compensate, but since Microsoft still loses money on each unit shipped, it won't hurt EPS.

Interestingly, Sherlund met with the company two days later at CES and said that while Microsoft execs downplayed the magnitude of any Xbox shortfall, they would not reiterate their earlier target of 2.75 million to 3 million units in the first 90 days of availability.

Microsoft, however, stuck by the goal of 4.5 million to 5.5 million units shipped in the fiscal year ending in June, said Sherlund, whose company has an investment-banking relationship with Microsoft.

It's a truism in business that sales lost to shortages have a built-in multiplier effect; it's almost always better to eat some inventory than to let customers walk away empty-handed, especially when you're selling a new product.

That's certainly true for the Xbox 360, which got out of the gate ahead of powerful new consoles expected from

Sony

(SNE) - Get Report

and

Nintendo

later this year. And now that the holiday season is over, those disappointed customers could decide to buy from the competition, and hardly anybody buys more than one console.

Not to be too Pollyanna-ish, but the shortfall does have a bright side -- if you're a

Celestica

(CLS) - Get Report

shareholder, that is. The contract manufacturer is now the third company on board to build the Xbox, and the job should help the company fill its new capacity in China, says Huang. Moreover, it will help Celestica, which is heavily concentrated in the enterprise and telecom markets, get a foothold in the consumer business.

Good for Celestica, but bad for

Take-Two Technologies

(TTWO) - Get Report

, which had a rough holiday season and

disappointing first quarter, in part because customers won't buy software for consoles that aren't on the shelves. Making matters worse, the expected presence of Xbox 360 games convinced some consumers not to buy games written for the original Xbox.

In a year in which Microsoft hopes to shake loose its frozen share price by exploiting a barrage of new products, including new versions of Windows, Office and the recently released SQL Server, the Xbox 360 stumble is not an encouraging sign.

Buyout, Buyout, Who's Got a Buyout?

The M&A rumor mill hit the red line this week, as

Computer Associates

(CA) - Get Report

made a significant purchase, and investors waited for word on the possible takeouts of

Computer Sciences

(CSC)

,

BMC Software

(BMC)

and (the least likely -- this week)

McData

( MCDTA).

A few weeks ago, we reported a comment by

EMC

(EMC)

financial chief Bill Teuber, in which he worried that the giant pool of

private capital sitting on the sidelines could make technology acquisitions even pricier than they have been. Sure enough, the

well-reported rumor of the day has private-equity group Blackstone, in tandem with

Hewlett-Packard

(HPQ) - Get Report

in the running to buy Computer Sciences.

They may not be true, but the latest round of rumors has certainly given CSC a ride -- up 8% since Wednesday's close. It's worth noting that there have been rumors of a CSC takeout since the fall, with other potential buyers including aircraft maker

Lockheed Martin

(LMT) - Get Report

.

Happy Days for BEA?

Shares of

BEA Systems

( BEAS), in the doldrums for some time, have had a 15% run-up since late November. Part of the reason: The company made a nice investment in Wily, which was

purchased this week by CA for $375 million.

Whatever money BEA made on its investment -- analyst Trip Chowdhry of FTN Midwest Research figures it racked up a tenfold gain -- is a one-time deal. But can it sustain the momentum?

Chowdhry, who was very bearish on the company but has since changed his tune, thinks good things are in store as BEA develops its services-oriented architecture.

But not everyone agrees: "I am taking the opportunity to lighten my position in BEA and take significant profits. It still could go up, but I just don't see much of a catalyst for sustained higher stock price down the road," said Brent McGibbon, principal of McGibbon Asset Management.