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Does Intel Know What It Wants From Atom?

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Yesterday afternoon, Intel’s CEO Paul Otellini seemed a little hazy on the future home for Intel’s Atom processor during the chip maker’s quarterly earnings call — a fact I don’t find all that surprising since the netbooks or mobile Internet devices the chips are designed for exist only in a marketer’s imagination and failed product implementations.

Otellini was excited about Atom, calling demand for the chip” robust,” but analysts pressed Otellini about Atom’s end market and whether the chip would cannibalize Intel’s low-end Celeron processor. The Celeron ranges from speeds of 2.13 GHz to 3.6 GHz, and is faster than Atom’s 1.8 GHz or 1.6 GHz. Otellini’s responses were less than a ringing endorsement of the chip. “[Atom] is less than a third of the performance of our Centrino (high-end mobile processor),” said Otellini. “You’re dealing with something that most of us wouldn’t use.”

Wait a second. Just weeks ago before the Computex trade show in June, Otellini told the Financial Times he anticipated a $40 billion market opportunity for Atom chips over the next few years. If most of us aren’t using these low-end chips, then who is? Otellini envisions the Atom chip for small computers in emerging markets that happen to have IP-based voice, but in late 2009 Intel will launch an Atom chip for smartphones. In emerging countries, a lot of computing is already carried out on cell phones, begging the question of where Intel’s demand for Atom is coming from. Will those products actually succeed?

As for cannibalization, Otellini said, “We do not see [Atom] replacing Celeron. If you look at the netbook products being built around Atom, they’re all lower-priced, lower features, smaller screen size notebooks aimed at first-time buyers or the second, third or fourth machine in a household. We don’t see any cannibalization.”

So Atom chips are designed for slow web access on cheap, portable machines that will act as the backup computer in my home. Wait, I have one of those already. It’s called a smartphone and plenty of companies already make processors for that market.

12 Responses to “Does Intel Know What It Wants From Atom?”

  1. Stacey Higginbotham

    I don’t think a shrunken x86 will ever be a great fit for the embedded market, but Intel may prove me wrong. As for the netbooks, Otellini pointed out in the conference call that Atom wouldn’t be good for photo editing or watching YouTube all day. As graphic intense apps take over the web, will the Atom powering an eeePC really offer what most consumers want?

  2. Richard

    Netbooks are not the same as smartphones, and they do exist – what do you call the Asus eee PC, which has sparked a whole new market sector in a way that the Palm Foleo and Microsoft/Intel’s UMPCs have completely failed to do? The key to netbooks is very low cost, so they are almost an impulse purchase and can easily be used for web applications, surfing and email, wherever you are.

    I have a smartphone, laptop and desktop, and I still want a netbook such as the eee. Mostly because my laptop belongs to my employer, and I’d like something I own that is much lighter for when I have a weekend away.

    Atom is a good fit for netbooks – there is a little overlap with Celerons e.g. some earlier eee models use Celerons, but increasingly netbooks will use Atom.

  3. Well, there are (semi-)successful MID’s — the Nokia N-series tablets (TI ARM CPU). But so far the only really successful mobile internet device is the iPhone (Samsung ARM CPU).

    As far as Charlie’s suggestion goes, well, ARM and MIPS CPU’s are already there (NAS, routers), are more integrated (e.g. Broadcom, Marvell & co have integrated NAS and router chips), are lower power, and are getting more powerful (Cortex A8, etc), and I’m pretty sure are substantially cheaper.

    I question Intel’s long term commitment to the Atom – I think if it isn’t very successful in about 3 years, Intel will dump it (just like they have in the past). Which is why, if I were going to select a MPU for an embedded system, I wouldn’t pick Intel.

  4. charlie

    hmm, no. I have 3 other CPUs besides my smartphone (Tivo, backup computer operating as network drive, and internet box) and all three could use an Atom. Great way for intel to expand into some new areas. Tivo could really use a more powerful processor, and having a second, small very cheap (under $300) computer could be useful as well.