Trade Resources Company News Analysts Said Intel's Atom Processors Designed for Netbooks Could Be on Their Last Leg

Analysts Said Intel's Atom Processors Designed for Netbooks Could Be on Their Last Leg

Intel's Atom processors designed for netbooks could be on their last leg, with analysts saying that the chip maker could be tweaking its product road map as PC sales tumble and tablet adoption widens.

Intel's most recent Atom processor targeted at netbooks, code-named Cedar Trail, may not be refreshed to its latest generation, analysts said. Netbooks are being kicked to the curb after a few years of success and Intel may be looking at an upcoming tablet-optimized Atom processor code-named Bay Trail to replace the specialized netbook chips, they said.

The chip maker had previously painted Bay Trail as a processor for tablets. But at the Intel Developer Forum in Beijing this week, the company said it is expanding the chip to sub-$599 convertibles, laptops and desktops.

Netbooks are low-priced, lightweight laptops designed for basic computing, with screen sizes up to about 12 inches and prices under $350. But as features such as touchscreens come to more laptops, analysts said there is a need for manufacturers to move away from underwhelming netbook chips.

"The market is clearly indicating stronger products for mainstream computing. That kind of pushes Atom to the fringes," said Dean McCarron, principal analyst at Mercury Research.

The Bay Trail chip is based on the new Silvermont architecture, and will succeed the Atom tablet chip code-named Clover Trail. Clover Trail is already in hybrid laptop-tablet devices such as Hewlett-Packard's Envy X2, but the devices are largely priced above $599. With Bay Trail, laptop makers will have the option to offer less expensive products.

Intel declined to comment on whether Cedar Trail would be refreshed. But the Bay Trail processor is being offered for mobile and desktop products and will meet the needs of buyers looking for value products, a company spokeswoman said.

Intel's Atom chips got a commercial start in netbooks in 2008. Since then, the company had a dedicated netbook chip lineup, with updates in late 2009 and late 2011. Intel has developed separate Atom chips for smartphones, tablets and servers, but the lines are blurring as features such as touchscreens and always-on connectivity reach laptops.

Intel pitched netbooks as companion devices and they enjoyed a few years of success, despite criticism. In 2009, Apple's Tim Cook, then the chief operating officer, described netbooks as having "cramped keyboards, terrible software, junky hardware, very small screens, and just not a consumer experience."

The market for netbooks with Atom peaked in the fourth quarter of 2009, with shipments at the time totaling 12 million units per quarter, which dropped to about 3 million in the first quarter of 2013, according to research by Mercury Research. Netbook shipments started declining in 2010, the same year Apple introduced the iPad tablet. Since then, netbook users have increasingly moved to tablets, and apart from Acer and Asus, PC makers including Dell and Lenovo have pulled Atom-based netbooks off the market.

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End in Sight for Intel's Atom Netbook-Specific Processors