The PC industry is going through a very, very dark period right now, with the netbook being the only bright spot on many manufacturers’ balance sheets. Since the saving grace of the industry is powered by Intel’s Atom chip, it shouldn’t come as a surprise that it’s also the only positive element in Intel’s abysmal quarterly results.
I won’t bore you with the figures, but suffice to say that Intel’s results over the 2008 final quarter are very, very bad. “The pace of the revenue decline in the quarter was dramatic,” confessed Paul Otellini, Intel’s CEO, during a January 15 conference call. “These numbers resulted from reduced demand and contractions across the supply chain. While inventories have declined, we are assuming further reduction in [the first quarter of 2009].” In other words: shit, meet fan. Despite the dramatic results and gloom prospects, the company will continue to invest in new technology during 2009, such as the tansition to 32nm.
The bright spot on the balance sheet is the Atom processor, revenue form which went up 50% between the third and fourth quarter of 2008, reeling in USD 300 million in revenue for the chip giant. With the popularity of netbooks still on the rise, Atom seems to be the chip on Intel’s shoulder (I hereby accept the 2009 award for lamest in-story joke on OSAlert).
Otellini waved concerns regarding the Atom chip cannibalising sales of more expensive Intel processors away. “While there is some cannibalization, the data suggests that the vast majority of netbooks sales are incremental,” he said. The Atom chip is creating its own market, without affecting sales of other Intel processors.
Intel is expected to release updated Atom chips in the second half of 2009.
Just as the catastrophe that wiped out the dinosaurs made way for smaller, more efficient lifeforms like us, so it seems the recession may be clearing away the cruft from the markets to make way for more innovative products, better adapted to the world as it is today.
Some of us actually do need workstations and desktop-replacement laptops.
Yes, a lot of people have quad core machines that are only used to browse the interwebs and watch movies, for them a netbook would probably be more useful.
For us (me at least), I need a full-size keyboard (very big hands) and I need as much power you can cram in a laptop or desktop. They are not dinosaurs and they are not going away.
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Edited 2009-01-17 19:46 UTC
“the company is estimating revenue of $7 billion for the first quarter of 2009”. Intel is continuing to invest in R&D when others won’t or can’t. This will further increase their lead in the market. See? There is a silver lining in this recession for some.
A silver lining for Intel, at least
With this in mind, I wonder how long AMD will continue to ignore the netbook market?
http://osnews.com/story/20592/AMD_Will_Ignore_Netbook_Market_Intel_…
Wait until 4th quarter. AMD is starting be consistent about being 2 years behind the rest of the market at this point. If they make it that long, that is.
Pretty funny AMD bought ATI. At this point I don’t wonder that if the deal were done today it would be the other way around (ATI buying AMD).
Edited 2009-01-16 16:51 UTC
Probably the same.
AMD is/was a much larger company, with larger revenues than ATI.
Just because ATi was able to launch a moderately successful product a few months ago, it does not mean that they have been able to turn the tables that quickly.
With the succession of lackluster products up to the 48xx series, probably the only reason why ATi didn’t go under was AMDs umbrella.
I wonder if (or when) AMD/ATI will find out, that including a GPU directly on-die with the CPU could be the next killer-chip.
They gave Intel a run for their money when they integrated the memory controller into the CPU. IO-intensive benchmarks showed AMD CPUs being equal or better for such workloads than Intel systems.
With todays software, more than 2 cores don’t increase the performance of desktop work anyway, so AMD could remove 2 cores from a quad-core processor and use the space for a GPU. And a good one at that.
Go one step further and also include the sound chip and north/southbridge.
THAT is the future for AMD, that is where AMD is good and where Intel is mediocre.
If AMD continues to compete with Intel where Intel is best, I see a problem for them.
That’s not as easy as it sounds. Especially the good GPUs get hot as hell. Even with a TDP of 140 Watts like the Phenom (1) had, they’d hit the ceiling real fast.
OTOH, they do have such designs on the roadmap. We’ll see what the future brings.
Correct me if I am wrong. But was it not a some rep from Intel just a few months ago saying that net-books were *NOT* a significant market with neither the size in sales nor long term volume to warranty Intel’s attention?
Or am I mixing up Intel for AMD?
Edited 2009-01-16 14:52 UTC
It was both of them – as recently as this past November:
http://www.osnews.com/story/20592/AMD_Will_Ignore_Netbook_Market_In…
I suspect Intel is just hoping that people have forgotten those comments by now (and given the almost complete lack of long-term memory in the tech world, they’ll probably get their wish).
Pah, Atom still amounts to less than 5% of Intel’s revenue. Just because it grew to 300 million in 2008 doesn’t make it significant in the greater picture.
Losing 300 million of business may not be important to Intel’s bottom line, but if Intel did not have the Atom to meet the need then some other smaller competitor may had been able to get that same money and a big boost to their bottom line.
I can’t see ARM, VIA or AMD not seeing a extra 300 million in sales as a good thing.
Edited 2009-01-16 19:20 UTC
Sure, less than 5% sounds small when taken out of context – but consider that it’s an increase from about 0% this time last year. And considering it’s the only area of Intel’s business that has shown growth recently, I would say yes, it is significant.
Taken out of context? It’s all in-context when it is part of Intel’s business products.
“Context” as in “context relevant to the points being discussed.”
Eh? How does a single quarterly report, taken in isolation, give you a useful context for judging whether or not the Atom is “significant in the greater picture”?
You sound like IBM did in the late 1970’s and early 1980’s when they saw Personal Computers as a ‘Flash in the pan’.
One of the reasons their design was so open and used commonly available parts was because they never saw it becoming a major percentage of their business.
Intel almost made the same mistake about net-books.
But of course. That was BEFORE they had decided to enter it.
I just picked up an Atom-powered netbook and was stunned by the performance.
I was expecting the machine to be ‘meh’ given the reviews I read about the CPU performance, but it is very very snappy and exceeded all my expectations for the device and what I use it for.
I really don’t see the need for a CPU with much more power for the vast majority of people who use computers for basic tasks such as surfing the web, email, light document editing, music and video play-back.
What OS was on it?
It is a Dell Inpiron Mini 9 that came with Ubuntu. It rocked, but I wiped it and put Mac OSX on 10.5.5 Leopard on it. Rocks the house!
I want to get a netbook just to have a small OSX machine.
I’m actually kinda looking forward to the new Viao P. I wish they’d come out with a netbook that doesn’t have 8 feet of freaking blank space around the screen, though. Annoys the heck out of me.
oh, and I wish they’d give the option to NOT have a glossy display. I happen to like matte and being able to see what I’m doing in almost all lighting conditions… *rolls eyes*
Edited 2009-01-17 19:58 UTC
Can somebody explain specifically what is the difference between a netbook and a laptop, other than the missing DVD drive? Or do some netbooks have DVD drives?
net books typically have a 10 inch screen (or close to it), 100 gigs of hard drive space or less, are much less expensive, are typicaly incapable of running vista (well), and are less expensive, they also weigh much less.
netbooks generally refer to machines that are very small and relatively inexpensive. Screens generally about 9″-10″ or less, and prices around $500 or less. Weight is usually around 2.2 pounds or less. They are only slightly larger than a paperback book generally.
Notebooks tend to be larger, heavier, more expensive machines. You can find machines that are as small as netbooks but cost well over $1500, but they tend to have more powerful CPS, better graphics, higher screen resolutions, and have docking stations available with Optical drives in them.
but also good for OpenSolaris. Atom motherboards are not many and easy to support for OpenSolaris.