Intel: Atom is Eating into Celeron, and That's OK
That's not the same as eating celery, right?
These days when someone is in the market for a portable computer, the choices now include netbooks. Most casual internet users mainly surf the web according to their interests and keep communicate via email and social networking sites.
With netbooks being the inexpensive solutions that they are, it’s easy to see why they’re eating into sales of notebooks. In fact, Intel puts netbook cannibalization of notebooks at around 16 percent – which means that the notebook segment lost around a sixth of its sales to the cheaper netbooks. This is of some concern to the industry as lower priced products could mean lower profits, but Intel doesn’t seem worried.
In fact, Intel argues that netbooks aren’t exactly taking over notebooks, at least not in a negative way, and has more untapped selling potential.
“The market has not all lept over to Netbooks,” said Intel Chief Sales and Marketing Officer Sean Maloney, according to CNet. “We're very comfortable with having established the (Netbook) category. We believe now that Netbooks are an under-distributed product line.”
Those looking to get a laptop for cheap are likely looking at Celeron-powered machine, and if the consumer buys an Atom instead, that doesn’t bother Intel.
“Atom is eating into Celeron. And we're quite fine with this,” Maloney said.
“There's great concern about the potential of the Atom mix because it's a lower selling price product, but it's also a lower cost product,” said Intel CFO Stacy Smith in a Reuters story. “And that cost really enables us to ramp it without having an adverse effect on the overall product margin of the business.”
Smith added that the Intel Atom costs a quarter of what it does to produce a quad-core chip (without specifying which quad-core).
This summer those shopping for a laptop will get another option thanks to Intel rolling out CULV (consumer ultra low voltage) chips that’ll enable affordable thin and light notebooks priced between netbooks and full-featured notebooks. We’ll likely get to see more of those at Computex next week.