© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
May 19, 2010 5:50 pm
The netbook has been knocked off its perch as the fastest growing category in the PC industry, toppled by two newer concepts that pose a challenge for the world’s biggest chipmaker.
Intel has dominated netbooks with its Atom microprocessor, but ultra-thin notebooks and tablet devices are enjoying a huge growth spurt.
Advanced Micro Devices (AMD), Intel’s rival in “x86” processors, has led in the development of ultra-thin or Consumer Ultra Low Voltage (CULV) as the category is known, while a host of semiconductor makers are competing in tablets with chips based on designs by the UK’s Arm.
In addition, Intel is unrepresented in a sub-category of netbooks known as smartbooks, which favour Arm-based chips and 3G wireless connectivity.
“Everybody says tablets are going to eat the notebooks’ and netbooks’ lunch,” Paul Otellini, Intel chief executive, told analysts at the company’s annual investor meeting last week, while insisting: “On the scale of the PC industry, they’re relatively insignificant.” Mr Otellini said tablets were fundamentally consumption devices that would not take away market share from netbooks.
He showed a chart representing 700m PCs shipped a year by 2014, with desktop PCs growing at an annual rate of 2.4 per cent, notebooks at 22 per cent, netbooks 15 per cent and tablets 73-88 per cent, according to the Gartner and InStat research firms.
Despite the high growth rates for tablets, they would only take up 50m-60m of those 700m units by 2014 on the most optimistic estimates, he pointed out.
Netbook shipments grew by about 103 per cent in 2009, but the market is now maturing. The iSuppli research company predicts growth of 30 per cent this year and 19 per cent in 2011.
Intel feels it can help sustain the category with battery life and performance improvements from Atom. It also sees strong growth at better price points in emerging markets.
Mooly Eden, general manager of Intel’s PC Client Group, told analysts Intel was serious about tablets and would actively participate in the category. “Stay tuned for Computex,” he said, referring to the upcoming Taipei show.
Taiwanese manufacturers planning tablets seem to be giving Intel a serious look
“Arm is better than Intel at power consumption but that is because its performance is not nearly as good,” said Sambora Chen, marketing director of notebooks at MSi. “That is not so much a problem in mobile phones because the display is much smaller, but it is an issue for notebooks and tablets.”
Arm processors have dominated in mobile phones because their low-power operation extends battery life. As their performance has improved, they have come into competition with Intel’s Atom chips which, in turn, are becoming competitive on low-power operations.
The Apple iPad’s A4 processor is reported to have an Arm-based design. Marvell Technology said recently it would ship Arm-based server chips this year, challenging a core Intel strength.
Intel has said its latest Atom chips should start to appear in smartphones in the second half, although handset makers seem reluctant to switch.
Tsai Ming-kai, Mediatek chief executive, says because all its chips have been designed with Arm “it just takes too much effort” to switch to Intel.
AMD has not produced a processor that is competitive with Atom in netbooks and smaller devices. Instead, it came up with the ultra-thin or “thin and light” concept for notebooks early in 2009, hoping consumers would turn to a category that provided more functionality and bigger screens than netbooks, but was still light, affordable and capable of long battery life.
For its latest generation, it has announced 26 ultra-thin notebooks, up 30 per cent on last year, offering up to eight hours of battery life. Intel is expected to respond in the second half with ultra-low voltage versions of its Core i3 and i5 processors.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in