Intel, the world's biggest chipmaker, expects to sell at least 50 percent more of its Atom chips for netbooks and other mobile Internet devices this year than it did last year, the head of that unit said.
Intel's revenues from Atom chips, which cater for a new and fast-growing market, rose 50 percent to $300 million in the fourth quarter. Overall company sales fell 23 percent to $82 billion as the chip industry struggles through the downturn.
We think there'll be at least 50 percent growth on Atom family products into the various segments between 2008 and 2009, Anand Chandrasekher, head of Intel's ultra-mobility group, told Reuters in an interview on Tuesday.
Netbooks -- pared-down, inexpensive, small notebooks made for Web browsing on the go -- are the one bright spot in a chip industry already in a cyclical slump and now further battered by a steep decline in consumer demand.
Global shipments of personal computer processors fell more than 11 percent in the fourth quarter but netbook sales are expected to more than double this year to about 35 million units, according to analysts.
Chandrasekher said the potential threat to Atom from processors based on ARM designs made by the likes of Qualcomm, Texas Instruments and Freescale, which should be coming onto the market this summer, was small.
We don't think they'll capture much, he said.
He said Atom chips had the key advantage of being based on the same x86 architecture that desktop computers run on, meaning they would deliver a truer experience of the Internet, which was born before the mobile Web existed.
There are 5 billion URLs (uniform resource locators, or Web addresses) that make up the Internet. While you are sleeping, another 10,000 get created, get added to that 5 billion. Neither you nor I know which of those 10,000 URLs is the next YouTube.
The consumer wants to be able to access that next YouTube as it becomes available, and that is only possible on our architecture, he said.
Software developers and applications developers write to the platform, and they want to be able to write it once and have it run everywhere, and that's just not possible on the ARM business model, he said.
Chandrasekher said the market for ARM processors was necessarily fragmented because chipmakers adapt ARM's designs to differentiate themselves, creating extra work -- too much work, he argued -- for software developers.
Korea's LG Electronics said on Monday it would develop a mobile Internet device, bigger than a smartphone but smaller than a netbook, around Atom.
Asked about the impact of the economic downturn on his business, Chandrasekher said: It's hard for us to judge it because it's not like it's an existing business. It's a business that was born during a downturn.
(Editing by Hans Peters)