Intel, The Atom, And The Netbook Market
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Intel has a special role in the netbook world, acting as the supplier of the most widely used chip in the market - the versatile 1.6 GHz Atom. However, analysts at Intel seem to have some doubts about the fate of the very netbooks their company powers.
According to Intel VP of sales Stu Pann, Intel believes it’s miscalculated what markets would go for netbooks.”We originally thought Netbooks would be for emerging markets and younger kids… It turns out the bulk of the Netbooks sold today are Western Europe, North America, and for people who just want to grab and go with a notebook… We view the Netbook as mostly incremental to our total available market.”
Pann’s biggest criticisms were of the small screens, which he believes are “not something you’re going to use day in and day out.” He cites eye strain and general discomfort for this reasoning.
It makes sense, of course, for Intel to say netbooks will only add incrementally to its income - after all, Intel is a massive company. However, we should remind ourselves that earlier this year netbooks’ enormous sales surprised Intel, forcing the technology giant to crank out thousands of Atom chips it hadn’t anticipated making.
The Atom chip is, for the moment, in almost every netbook around. It is easy to forget that the Atom is a mere six months old. Pann’s reluctance is sensible, in this light, but as for netbooks not being used by owners on a daily basis, I’m skeptical. After all - are netbooks not the ultimate tools for commuters?
To expect an owner of a netbook to use it as a replacement for his main working machine is unrealistic - netbooks were never meant for that. Mobile users will use netbooks for short amounts of time - in the train, while on break, waiting at a bus stop - which conforms well to Pann’s “fine for an hour” statement.
While it’s been supposed that netbooks’ rise is due to the shortchanged economy and consumers’ need to save money, this analysis ignores several factors. Netbooks have been gaining luxurious new features to please those with some money to burn - consider the touchscreen Raon netbook or Hello Kitty netbook, about which we recently wrote. The market has proven that netbooks are not just cheaper, crappier laptops, and Intel should take heed of this.
It would be short-sighted and senseless for Intel to stop the experimentation with the new netbook market, considering the recent explosion of new netbook releases. In my opinion, the rise of netbooks is more than a trendy bump in the timeline of technology - it is indicative of a change in the market itself.
The fact of the matter is that shoppers are showing that they want a cheap, slim laptop-like device, no matter how knockoffy netbooks seem. They are buying netbooks, and skepticism can’t make much of an argument against that - at least for now.
Intel has the potential for far more profit in its hands, given the netbook community’s clear preference of the Atom, and would do well to let the market prove its sustainability.