Sales of Intel Atom Hit All-Time Low: Netbooks Doomed

Intel Atom Technology Continues to Lose Popularity on PC Market

by Anton Shilov
01/20/2012 | 04:28 PM

While Intel Corp. is facing great demand towards its advanced Core i-series "Sandy Bridge" microprocessors, the firm of witnessing rapidly dropping demand towards its low-cost/low-power Atom chip line. In Q4 2011 sales of Intel Atom hit all-time low, which is another evidence of dropping popularity of netbooks and ultra low-cost PCs powered by Intel in general.

 

Based on Intel's financial report, the Atom micro-architecture revenue, including microprocessors and associated chipsets, was $167 million, down 38% from the third quarter and down 57% from the fourth quarter of 2010. Apparently, even despite of the beginning of revenue shipments of Atom 2000-series "Cedarview" chip, overall sales of the product family fell significantly. According to the world's largest chipmaker, Intel Atom micro-architecture revenue is down as a result of lower demand for netbooks, inexpensive small form-factor mobile computers with limited performance and capabilities.

Thanks to growing popularity of tablets, mainly as a result of major improvements of Apple iOS and Google Android software as well as price drops and/or campaigns, sales of netbooks suffered another major decline in the fourth quarter of 2011. Unfortunately for Intel, it yet has to win media tablet designs and presently it cannot offset netbook declines with surge of x86-powered tablets.

It is clear that Intel will continue to supply standalone Atom chips to PC makers interested in making inexpensive systems, those systems will be vastly different from netbooks as we know them and eventually will also demand more powerful microprocessors, which Intel seems to be on track to provide. The ultra low-cost personal computer (ULCPC) idea - which emerged together with Atom and then Windows Starter - has clearly failed to catalyze sales on both emerging and established markets.

It is noteworthy that Intel did not even specifically mention Atom during its conference call with financial analysts on Thursday. The company did say that it was working hard to get additional tablet and smartphone design wins with its code-named Medfield chips, but Intel's execs did not mention "Atom" brand name for some reason at all.

But it clearly not the end for the Atom. It will change form-factors and will leap to new performance levels as Intel needs an ultra low-power micro-architecture to address very different markets. In the coming years the chip designer 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 process; the third major improvement of the Atom has Airmont code-named core and is aimed at 14nm fabrication process.