1 in 5 Choosing Netbooks Over Notebooks: Intel

intel-atom-insideIntel (s INTC) believes the cannibalization of notebooks by netbooks to be at around 20 percent, Reuters reported today. Christian Morales, the European sales chief for Intel, estimated that netbooks currently comprise about 16 percent of worldwide notebook sales, though he put that figure slightly higher for western Europe, and said it could be as high as 25 percent in Britain and Italy. Morales also admitted that Intel’s Atom processor, which is used in netbooks, is cannibalizing sales of its cheaper Celeron processors, which are used in low-end notebooks. Though Intel has long maintained that the Atom chips, while cheaper, also have a higher profit margin.

Atom and netbooks will also drive growth for the chipmaker as people increasingly become more mobile, executives said at a company event today in London. Intel expects to sell twice as many netbooks in 2009 as it did last year. That means Intel is continuing to pay close attention to the flip side of the mobility coin — broadband access. Aside from investing more than a billion dollars in WiMAX, Morales said that Intel was working with governments in Africa to reduce the price of broadband access to below $100 a month, which would help drive adoption of the low-cost netbooks for web access. For now, the cell phone is the main tool for web access in developing and third-world countries, but since Intel won’t have chips out for the cell phone market until late this year or next, it needs to push netbooks for now.