What is Intel’s plan for the Atom?
Intel’s mobile chip the Atom has generated so much buzz in the tech space that it’s easy to believe we should see these chips in everything on the market. The original plan was to offer the Atom in Mobile Internet Devices (MIDs) due to their low cost, low power requirement and small size. Then we started seeing them crop up in mini-notebooks running Windows, no doubt due to the three factors I mentioned. I’m beginning to wonder what Intel’s official plans are and GigaOM is wondering the same thing after listening to Intel CEO Paul Otellini’s quarterly conference call yesterday.
Otellini was excited about Atom, calling demand for the chip” robust,”but analysts pressed Otellini about Atom’s end market and whether thechip would cannibalize Intel’s low-end Celeron processor. The Celeronranges from speeds of 2.13 GHz to 3.6 GHz, and is faster than Atom’s1.8 GHz or 1.6 GHz. Otellini’s responses were less than a ringingendorsement of the chip. “[Atom] is less than a third of theperformance of our Centrino (high-end mobile processor),” saidOtellini. “You’re dealing with something that most of us wouldn’t use.”
We wouldn’t use it because it’s too anemic? Oh boy, I’ve been saying that and getting flayed for it but this is Intel’s CEO! So with no real MIDs on the market yet who should be using the Atom? It sounds like not even Intel is very sure.
There’s such a thing as too much honesty…
Intel is a very iterative company, and Atom is the first iteration of a new line of processors. It is a shot across ARM’s bow, but its importance for the moment is strategic more than anything else. It does fulfill the need for cheap processors when processing power is not a concern, but Via’s Nano provides the same advantages.
What Atom does demonstrate is that x86 is in the low-power mobile market in a big way, with Intel’s official backing. That’s gotta make ARM manufacturers very nervous.
Intel’s plan is simple and mirrors the one played against Transmeta. The plan is to KILL the competition, in this case, specifically Via. Via kicked off the market with Isaiah CPU and Intel followed. Once Intel makes the market unviable to make any $$ then Intel pulls back on the reigns. So Via is kinda dead on the netbook side given all the Atom design wins and it doesn’t appear AMD will be getting into the game. Intel will now start pulling back on production because they make 2X the gross margin dollars on Centrino as they do on Atom. Playing out just like Transmeta….. kill the small guy then pull back.