End is in sight for Intel's Atom netbook-specific processors

Analysts say that Atom netbook chips may be replaced by an upcoming tablet-optimized Atom chip

By , IDG News Service |  Hardware

Intel pitched netbooks as companion devices and they enjoyed a few years of success, despite criticism. In 2009, Apple's Tim Cook, then the chief operating officer, described netbooks as having "cramped keyboards, terrible software, junky hardware, very small screens, and just not a consumer experience."

The market for netbooks with Atom peaked in the fourth quarter of 2009, with shipments at the time totaling 12 million units per quarter, which dropped to about 3 million in the first quarter of 2013, according to research by Mercury Research. Netbook shipments started declining in 2010, the same year Apple introduced the iPad tablet. Since then, netbook users have increasingly moved to tablets, and apart from Acer and Asus, PC makers including Dell and Lenovo have pulled Atom-based netbooks off the market.

Slow netbook sales were partly responsible for the 13.9 percent year-over-year fall in PC shipments during the first quarter this year, IDC said this week. Netbooks are now a small niche market with an audience in developing countries, said David Daoud, research director at IDC.

Intel is likely to replace its netbook processor lineup with the Bay Trail chip or the low-end Celeron chip, which is for entry-level laptops, said Jim McGregor, principal analyst at Tirias Research.

"I would expect they are not going to announce another netbook processor," McGregor said.

Netbooks were an artificial market created partly by the global economic crisis, and the low-cost laptops resonated well with price-conscious buyers, McGregor said. But over time, weaknesses in netbooks -- slow performance, cramped keyboards and small screens -- were exposed.

"Users want a tablet or a more fully functional notebook," McGregor said, adding that an entry-level laptop with more features costs just a few dollars more.

PC designs are also changing, and Intel is trying to put the term "netbook" in the past, McGregor said. For a product like Bay Trail, Intel "will not call it a netbook processor," McGregor said.

If users want $250 computing devices, they can buy Chromebooks, which come with ARM or Intel's Celeron processor, or cheap Android tablets, said Mercury Research's McCarron.

Low-cost Android tablets are available with ARM or Intel's Atom smartphone processor variant code-named Lexington. Chromebooks start at $199. Also, the Windows 8 OS does not work on the latest Cedar Trail netbook chip.

Intel is trying to keep up with the times and future Atom chips like Bay Trail could perhaps be a natural successor to the company's netbook chips.

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