Popularity of Intel Atom Drops Sharply: The End of Netbooks Is Coming Closer?

Sales of Intel Atom Processors, SoCs Drop to Two-Years Minimum

by Anton Shilov
10/21/2011 | 09:17 AM

It is not a secret that thanks to media tablets and inexpensive notebooks the popularity of netbooks is declining rapidly. It looks like in the third quarter the fast erosion of netbooks intensified and consequently sales of Intel Corp.'s Atom central processing units dropped to two years minimum.


In the third quarter of FY2011, Intel Atom family revenue, including microprocessors and associated chipsets, was $269 million, down 24% from the second quarter and down 32% from the third quarter of 2010. The result is well-below logical seasonal patterns and clearly indicates lowering popularity of netbooks, such as Acer Aspire One- or Asus Eee PC-series, and nettops.


Given the lack of major tablet design wins, sales of Atom system-on-chips cannot offset dropping shipments of microprocessors for ultra low-cost personal computers (ULCPCs). Obviously, there are still millions of notebooks and netbooks sold, but their market share is dropping and volumes are most likely lower than combined sales of popular media tablets, such as Apple iPad and Samsung Galaxy Tab.

It is noteworthy that despite of expectations from several years ago, Intel Atom did not become incredibly popular on emerging markets. Entry-level PCs did not conquer China, India, Latin America and others and so did not Atom.


But Intel believes that the game is over for Atom. In the coming years the company will not only continue to introduce new micro-architectures for Atom-branded solutions, but will continue to tailor microprocessors and system-on-chips for tablets, smartphones and so on.

"Intel has tailored Atom for low-end PCs, it is now tailoring it for tablets. We are tailoring different versions of Atom for handsets and cell phones, and other versions for embedded and automotive implementations," said Paul Otellini, chief executive officer of Intel, during a conference call with financial analysts.

In the next 36 months the world's largest maker of chips plans to release three major updates for its Atom family of solutions. The first one will be code-named Saltwell and will be made using 32nm process technology; the second is currently known as Silvermont and will be manufactured using 22nm/tri-gate fabrication processor; the third major improvement of the Atom has Airmont code-named and is aimed at 14nm fabrication process.