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Netbooks no longer appeal to first time buyers says Intel

The world of microprocessors is dominated by Intel with secondary players like AMD coming in far behind. Intel helped to usher in the era of the netbook with its wildly popular Atom line of CPUs and still has little in the way of competition.

Intel has announced that it sees the netbook market shifting. The company said that it no longer expects netbooks to appeal to first-time buyers. Intel says that it sees netbooks as a secondary computer for users or an option for kids needing their first computer.

Intel's Sean Maloney said at a media event, "I don't think first-time buyers are going to buy netbooks. The first time you buy something you want the real deal. It's consistent not just in China, but all around the world. If you're going to spend your hard-earned money for the first time, you're going to put a computer in your house."

Maloney said that he doesn't see the trend of netbook sales changing soon. The machines have traditionally sold to users with one or two PCs in the home already. He also adds that the market for kids 7-11 years old is underserved. Disney for instance is offering a netbook for kids that is festooned with Disney characters and software right out of the box.

EWeek reports that Q2 revenues for Atom processors and chipsets spiked 65% from the first quarter to $362 million. This was also the quarter where Intel had to pay the massive EU fine, which it is appealing. Intel also still maintains that netbooks will allow new people to be introduced to computing, which is particularly important in emerging markets. Netbooks, according to Maloney, are now a well-established market.

He said, "There is a new category established. That category is, to an extent, maturing. It is not so much in the early phases."

Much of the netbook focus isn't on the U.S. market with the economy still in a recession. Intel says that it sees the economy in areas like India and Brazil improving.

He says, "If you are dependent on the U.S. consumer, or U.S. business alone, obviously you are in one box. If you are global, you're in another. There are a number of countries, Brazil included, that actually seem to be coming back pretty quickly."

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Where is AMD?
By Belard on 7/30/2009 11:25:33 AM , Rating: 5
AMD.. what are YOU guys doing?

When the netbook market was forming up, big ol' Intel saw the same problem that others did. VIA's C3 type CPUs are weak as always and decided go into that market by re-packaging and updating a PentiumIII CPU.

How hard would it have been to re-package an AMD-32/XP mobile CPU into a smaller package (and remove some useless items) and bring that to the market? Considering that the AMD XP 2500 is more poweful than the P4s of that era and more so than the Atom... you guys could BE in that market as well... along with YOUR OWN ATI chipsets.

When you can make low-power dual core 64bit CPUs use 45watts or less today. I imagine you guys can do even more so with an older CPU... Like this AMD-XPm CPU at 35w with 130/180nm manufacturing (HUGE by todays standards)
Athlon XP-M 2200+ 1800 MHz Repackage it into a smaller package that is 1/3 the original size (453 pins). Grab a mobile ATI chipset and you're ready to go.

Could have been a bit cheaper than Intel, with better graphic performance and lower energy than intel. Then grab some market and respect.

AMD, you are blowing it again... But yeah, its understood that unlike Intel - you guys don't have the $$$ to R&D an old chip and manufacture on a newer smaller process. If you guys weren't in the red and blew it with the first X4 CPUs and held your own when C2D first came out - you could have done this.


RE: Where is AMD?
By Spivonious on 7/30/2009 11:28:25 AM , Rating: 2
Screw the Athlon XP. Put an old Thunderbird in a 45nm package and I'm sure the power levels would be low enough for a netbook.

RE: Where is AMD?
By HrilL on 7/30/2009 11:53:51 AM , Rating: 2
And it would still rock the atom as well.

AMD is avoiding the "netbook" market. They do have some new CPUs in the channel for ultra-mobile notebooks. They want to actually give people some bang for their buck while Intel does things differently. They give you crap and then when they finally come out with something better they expect you to spend more money on that. Smarter marketing but worse for the consumer. AMD's marketing has always been their major downfall. When was the last time you saw AMD ads?

When AMD had a better product Athlon x2 days Intel had so many ads and now that they are in the lead again I don't see many ads for them either. AMD needs better marketing if they want to get out of the hole they're in. Having a better product alone won't get you to the top.

RE: Where is AMD?
By Souka on 7/30/2009 6:57:46 PM , Rating: 3
I just love reading all these Pro AMD, anti-Intel comments....and vice versa...

"Intel does things differently. They give you crap "

RE: Where is AMD?
By Moishe on 7/31/2009 11:18:11 AM , Rating: 3
Not just better marketing, they need better everything.

AMD has some great CPUs and some great technology, but they're not executing well at all.

At it's size Intel should not be so much more nimble than AMD... but they ARE. Intel is executing their business almost flawlessly. I have always been a fan of AMD, but I have to admit that Intel is handing them their arses, and it's not just a matter of more money. This is a management issue. If AMD had technology that was similar and the management to predict, understand, and enter emerging markets quickly AND market themselves well, they would do well despite Intel's competition.

RE: Where is AMD?
By teldar on 7/30/2009 11:56:39 AM , Rating: 5
The Barton core was the best. After that it was a step backwards. I can't remember now, but I think it had more cache than the models that followed it, even though it was on a larger process. All I know is that both my parents have barton core XP's running that have been through a few motherboards each.

Beautiful CPU's.

RE: Where is AMD?
By Sulphademus on 7/30/2009 1:12:49 PM , Rating: 3
Barton was the last of the K7 Athlon line.
Barton doubled the L2 cache to 512. I dont remember if there was anything else different. [Maybe 90nm vs 130?]
The Hammer (Claw/Sledge) Opteron and Athlon 64 (K8) were the next ones after Barton.

RE: Where is AMD?
By Trippytiger on 7/30/2009 8:03:48 PM , Rating: 2
Barton was 130 nm. Big and high-voltage, just the way I like it!

RE: Where is AMD?
By djc208 on 7/30/2009 12:03:41 PM , Rating: 2
I think the other big problem is they don't have the fabrication capability. Even if they got something together tomorrow, it doesn't have a place to make them. It's only 45nm fab is probably full with it's desktop chips.

Besides it seems like they're doing OK in the low end laptop market, especially with their chipsets which have much better integrated graphics than the Intel machines in the same class.

But you're right, something here would be better than nothing.

RE: Where is AMD?
By PrinceGaz on 7/30/2009 4:28:34 PM , Rating: 3
AMD don't have any fabrication capability as they sold that side of the business so that they could concentrate on CPU design and selling. Therefore if Global Foundries doesn't have spare 45nm capacity, they could always have someone else like TSMC do it at 55nm or possibly 40nm.

RE: Where is AMD?
By crystal clear on 7/30/2009 1:02:06 PM , Rating: 2
Sorry the netbook market is exclusively for Intel & partners ....No AMD & No Apple -its just too late .

Soon it will be netbooks against smartbooks competing for their market share,namely Intel & ARM

RE: Where is AMD?
By Belard on 7/30/09, Rating: 0
RE: Where is AMD?
By crystal clear on 7/30/2009 9:00:07 PM , Rating: 2
Intel is not exclusive... They don't own the right

Yes they have become exclusive courtesy of & thanks to AMD .

Apple does not know how to make junk (as they call it).

I wish to see serious competition between Intel & ARM.

As for AMD they dont seem to get out of their spiral of losses & lame excuses & poor product offerings.

AMD is ready for a buyout/takeover by another company sooner or later.

RE: Where is AMD?
By augiem on 7/30/2009 2:19:21 PM , Rating: 2
No Apple? Yeah, for now. I would not be shocked at all to see Apple unveil a netbook. And it will of course NOT be called a net book and absolutely will be a revolutionary achievement for mankind.

Might be cool though. They'd probably give it a touch screen.

RE: Where is AMD?
By therealnickdanger on 7/30/2009 2:35:38 PM , Rating: 4
It will also debut for the bargain prices of $999.99.

RE: Where is AMD?
By smilingcrow on 7/30/2009 2:49:04 PM , Rating: 3
So many people here are assuming that AMD can build a more power efficient CPU than Atom for the Netbook market. Why assume that? Intel have easily had the more power efficient processors outside of the server market for years now so why you should AMD suddenly be able to build an Atom smasher? Considering Intel’s fabrication advantage over AMD it’s not an easy thing for them to beat Intel. Surely Intel will be first with a 32nm Netbook CPU which alone could give it a significant advantage.

RE: Where is AMD?
By DotNetGuru on 7/30/2009 4:34:45 PM , Rating: 1
Oooh, the Atom-Smasher... I like that name.
The problem is that Intel's architecture is years ahead of AMD and Intel is able to sell processor designs from a few years back as 'new' netbook processors. As always, the only reason AMD is still around is because Intel wants them there.

RE: Where is AMD?
By Moishe on 7/31/2009 11:25:37 AM , Rating: 2
AMD may have failed to start well, but nobody can be ruled out. The market for processors is always changing. If AMD had that mindset, they would have never entered the CPU market to begin with.

There is always room for innovation.

RE: Where is AMD?
By sprockkets on 8/1/2009 10:13:46 AM , Rating: 2
They do have an ATOM like cpu, it's called Geode, and they have the low power Athlon as well.

How many Atom boards have you seen? Now try and find AMD's low power processor for sale, anywhere.

By theanomaly1 on 7/30/2009 11:23:32 AM , Rating: 1
You know, that's not necessarily such a bad thing.

<sarcasm> Cause I mean, every 7 year old I know absolutely needs a computer... </sarcasm>

By Belard on 7/30/2009 11:35:08 AM , Rating: 2
My 4 year old has his own desktop. Even when he was 3 he had a computer, it was an AMD-XP system.

Now its an AMD X2 CPU, 2GB RAM, GeForce 8600GT and Windows7rc (He likes Windows7). He plays his games, runs his educational software and draws on the computer. I use it at times to test things with Windows 7.

He can even plug his whole computer up.

I'm looking at a netbook in the future for him to do homework and such on... its portable. Or the OLPC2... but that maybe too limiting, even thou its VERY cool.

By CurseTheSky on 7/30/2009 12:41:40 PM , Rating: 2
I built my girlfriend's son his first desktop when he was 3 as well. He's 5 now, and it's still chugging away with an Athlon XP, 512 MB of RAM, 9800 XT, and a case with glowy lights. Out of all of his "toys," he prizes that one the most.

He started out slow with it - he had a hard time using the mouse and needed help figuring out what buttons to press on the keyboard - but now he's a whiz. He has his own music collection, plays Jumpstart games, and draws using MS Paint. No doubt he'll have no trouble adapting to using computers exclusively for school work, since that's the way things seem to be going in the future.

We got our first computer when I was only five, and I don't regret it in the slightest.

By Belard on 7/30/2009 2:41:28 PM , Rating: 2

When he was 1, I gave him a PC that was retired by a client. It was a $1500 PIII-1000 / 512mb computer I built. I did a fresh install of Win98, put Write and Paint on the desktop and 1-2 ED games and let him at it.

After his 3rd Birthday, I gave him another retired PC: A Compaq with an AMD64-3200. It had a 9200 AGP card, but some of the games he wanted need more power... I had my trusty and dusty ATI9800Pro and stuck that in there. WindowsXP of course. But a few months ago, the mobo was failing and might have damaged the 9800Pro... eventually, the whole PC died... so it lasted over a year.

So I rebuilt his mothers Compaq (AMD64-3700 - looked like his OLD computer too) that was in storage. I had a 8600GT handy and that got him back in business. That lasted about a month... its CPU always ran hot, the PSU was only 300watt and so it ran loud when he played games or Youtube, anything that hit the CPU...

So I took MY old computer which I was saving for a HTPC. Its in a $100 Antec case with a clear window, has a blue light on it. AMD X2 3800, 2GB, 8600GT. Because of timing, I put Windows7 on it and it runs very good. I recopied his games. Its much quieter and flys with Windows7. MS included a childs game which he loves. MS Paint for Windows7 is vastly improved (as is word pad) so he's having fun with those.

I don't use Win7 on my computer yet. ;)

Oh, I had noticed a problem with the mouse because he's so young and playing games made it difficult to control the buttons. I bought a notebook mouse (wired of course) from Logitech for $15... so it fits his hand perfectly and it looks very much like my mouse. (His PC is in my computer room) Check it out:

His keyboard is a Logitech wireless, it matches his mouse. I got it free from a client who was going to throw it away. So when he's in trouble, I can take his keyboard away very easily.

My first computer was in 1985, 1mhz Commodore. So, figure this... my 4yr old has a PC more powerful than what I had 5 years ago. ;)

Of course, what you can get today for $300~375 is sick.

By FITCamaro on 7/30/2009 12:43:50 PM , Rating: 5
How about he go outside?

By Belard on 7/30/2009 2:21:41 PM , Rating: 2
As I finish these two posts quickly, I'm going to go play with my son with his Thomas train set. He is already building something new.

He has had his own computer since he was 1... since he wanted to be like mommy and daddy. Also keeps him off our computers ;)

For the most part, I rarely have shown him how to DO anything. Kids can figure some things for themselves and its a great way for them to learn.

By bohhad on 7/30/2009 8:21:21 PM , Rating: 2
How about you go outside?

By Moishe on 7/31/2009 11:34:31 AM , Rating: 2
Kids don't "need", but if you want them to be well-versed, the sooner the better. I know some 5 year olds that can do everything on a PC better than most elderly people.

It's the future, gotta be prepared.

Doesn't Compute
By GaryJohnson on 7/30/2009 10:27:13 AM , Rating: 5
The company said that it no longer expects netbooks to appeal to first-time buyers.

The machines have traditionally sold to users with one or two PCs in the home already.

So that's not really a "shift" then is it? If they've traditionally sold to users with one or two PCs then they haven't been appealing to first time buyers. Or was it that intel expected them too and they were wrong?

RE: Doesn't Compute
By rzrshrp on 7/30/2009 10:58:14 AM , Rating: 2
Agreed, the title, even though DT didn't create it, doesn't really make sense. Maybe the shift is in Intel's expectations of the market, not in the market itself. I always thought that netbooks best serve as a secondary or even a tertiary computer. It's like a superpowered pda, you can find plenty of useful things to do with it but you can't do everything with it. No one recommends them as a main computer except for possibly the elderly "just check my e-mail and read aol news" crowd.

RE: Doesn't Compute
By crystal clear on 7/30/2009 11:56:31 AM , Rating: 2
The real source of this article is this-

Intel sees no first-time PC buyers for netbooks

RE: Doesn't Compute
By invidious on 7/30/2009 2:21:53 PM , Rating: 2
All of the quotes indicate that Intel has decided on a change in their corporate strategty. Yet the blog seems to pawn this off as a predicted change in the buying trends of the market. Bad journalism.

By Spivonious on 7/30/2009 10:24:57 AM , Rating: 3
This is one of those "the grass is green" realizations. I don't know anyone who bought or is contemplating a netbook as their first computer.

RE: Duh
By Silver2k7 on 7/31/2009 6:28:54 PM , Rating: 2
I would personally not even consider a laptop as a first computer, desktop all the way. Than laptop as the 2nd computer. Netbok maybe as third option, but probably not.

Not surprising at all...
By Pearce Smithwick on 7/30/2009 10:30:17 AM , Rating: 1
I expressed essentially the same sentiment here:

Netbooks are companion devices - simple as that.

RE: Not surprising at all...
By TechJunko on 7/30/09, Rating: 0
RE: Not surprising at all...
By Belard on 7/30/2009 2:54:49 PM , Rating: 2
Perfect explanation of the netbook.

When most people need a portable computer for outside a home, why buy/bring along a $1000 17" Desktop replacement? When you LOSE that computer (airport / stolen out of car) you are out of everything you own, security risks and of course $1000+ computer.

A $250~350 netbook that has what you need... perfect. Now, the $1500~3000 mini notebooks by Sony, Apple, etc are more powerful than what more people need and cost a lot of money.

Easier to sell a $300 computer than a $3000 one.

I think with NETBOOKS, we may even see the return of the Desktop computer... they are still better than notebooks and cost less.

You can run your Desktop as a server - transmit videos to your netbook as well as photos, etc anywhere in your home.

New chipsets needed
By WinstonSmith on 7/30/2009 10:56:01 AM , Rating: 2
For me, the market will "shift" to the point where I actually buy a netbook when the next generation of chipsets comes out. The current silicon is too anemic. The fact that Intel has delayed the release date for their next netbook chipset shows what would happen if Intel was the only game in town. Less competition results in less incentive to improve hardware. Big surprise, huh?

Intel - You stupid
By Belard on 7/30/2009 11:05:23 AM , Rating: 2

Netbooks were never about being a primary computer. Of course since they are mostly functional like a notebook, they can be. For most people, its a portable computer.

Notebooks still make poor desktop replacements. The keyboard is attached to the monitor, the mouse is still better than a track pad. The costs, heat, upgradability, etc.

Look at a notebook that is always plugged into the AC and used as a desktop... its kind of dumb.

But a $250~400 very VERY portable device, that IS more usable then a notebook and cheap. I like my Thinkpad, but there are still times in which I think of selling it and getting a 2~3lb netbook.

The sponsors of tommorow
By crystal clear on 7/30/2009 12:47:31 PM , Rating: 2
Now await the next round of upgrades (2010) from OEMs putting out new netbooks that would be driven by two factors:

a new processor and new operating system.

After the netbook success Intel now takes a on new trend setter namely "ultra-thin notebooks" at mainstream prices

Intel is taking ultra-thin notebooks to new levels through a combination of breakthrough ultra-low voltage small form factor processors and innovative thermal and cooling technologies.

These advances enable a host of new, very thin consumer laptop designs with long battery life and mainstream price points.

? Calpella is the codename for the next generation of mobile processors and the company’s first laptop chips based on the Nehalem microarchitecture. Scheduled to launch later this year, it will consist of the 5 series chipset, Centrino wireless and the Clarksfield quad-core processor. Later it will include the Arrandale processor.

Pine Trail is Intel’s next-generation netbook platform, a two-chip solution versus today’s three-chip solution.

The platform includes the 45nm Intel® Atom™ processor, codenamed Pineview-M, and integrates graphics, display and memory controllers on the processor. The platform also includes Tiger Point, an input/output (I/O) hub. The integration in Pine Trail will offer overall platform BOM savings, improved performance, graphics, thermals and lower average power compared to today’s solutions.

First timers
By mixpix on 7/31/2009 2:02:55 AM , Rating: 2
First time notebook buyers generally don't know what they want/need. Everyone seems to start off wanting a notebook with a big screen, but then when they have to lug it around and only get 2 hours of battery they start to wish they had something different.

Netbooks get the job done, and they're cheaper, easier and run longer. If you're not gaming or doing high-end computing (which should be done on a desktop) you might as well buy a netbook. Unless you're half-blind, then get a large screen.

By crystal clear on 7/31/2009 3:51:14 AM , Rating: 2
If Intel is talking then Microsoft is also talking,here a few topics discussed-read full speech on link below.

Financial Analyst Meeting 2009
July 30, 2009

Steve Ballmer
Chief Executive Officer

and what's a netbook? A netbook is a PC. Nobody wanted any netbooks that didn't have Windows on them. So we went from nothing to about 95–96 percent attach on netbooks. And I will tell you the other 4 percent probably have Windows on them also.

These new ultra-thins—as Intel likes to call them—devices are essentially like high-end netbooks. So we will have a range, and then when our business customers say, "Can we buy a netbook? We want it to have a bigger screen and a little more performance," we'll say, "Yeah, here's a thing called an ultra-thin." It is a high-end netbook. That's very important because we're here to talk about revenue and shareholder value. It is very important. That machine might not sell for $299 or $399. That machine will sell for more money, and it will have all of the best performance and power characteristics. So the dynamics of this will continue to change.

We are a high-volume player. We do not, say, like Apple, believe in low volume, very high prices, very—Apple is a great company, does a fine job. But their model says high margin, high quality, high price. That's kind of how they come to market.

And at least when Apple attacks us, the primary attack that comes from Apple is, hey, at the end of the day, we have the coolest hardware.

When you see the hardware, the PC designs that will come out this Christmas with Windows 7, I think that conventional wisdom can begin to really change. There is some really amazing, amazing work. So it is possible to get great hardware innovation, even when hardware and software comes from separate companies.

And are the ads working? In an independent survey, we asked 18- to 24-year-olds—or they were asked, "Who offers the best value, Apple or Microsoft?" You can kind of see Apple was comfortably ahead despite the fact they —well, despite whatever the facts are. Our ads started in April of '09. You can see kind of what the perception changes have been so far.

This is a piece of data. There is more. All I'm trying to do is tell you I think we're making a difference, which means as shareholders, I'm also telling you to expect us to continue to invest heavily in Windows marketing which is new. We didn't do that three, four, five, six years ago. So it's a new element of the overall Windows P&L cost structure.

Microsoft Financial Analyst Meeting 2009

Intel bleeds from the ATOM.
By fteoath64 on 8/1/2009 8:06:11 AM , Rating: 2
At such a low price for ATOM systems, the margin is just razor thin. For each laptop sold, Intel wished it could have sold a C2D CPU, and now they wanted to "shift" away because they needed the margins to maintain they business going forward.

This is one of the reasons AMD and VIA did not get into this market at all, to all our surprise. They don't want to bleed becuase they cannot afford to. Yes, there is a market but at margins that are not business worthy at all. So why do that ?.

Look at why Intel is so hesitant to scale the Atom to 2.0Ghz, 2.2 or even 2.4Ghz speeds. That will hit the C2D market bad even though the ATOM would be slower in actual speed. Theses machines are hovering around $1000 mark and would be hard pressed to "slash & burn" towards the $400 mark. Yeah, ATOM is a game-changer but it is not sustainable, so the sole producer is going to kill it. Simple.

If AMD and VIA wants to go for the $500-$600 market when the $400 and below market dries up, then good. Intel will likely drop prices of 1.8Ghz, 2.0 Ghz C2D to compete.

"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates
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