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Wednesday, July 2, 2008

Intel Looks to Power Bottom of Market

Atom Chips Will Serve In Notebooks, Desktops Priced as Low as $200

Intel Corp. plans to formally introduce on Tuesday a much-anticipated chip for use with low-priced computers, though recent product delays likely will loom over the chip maker's announcements at a big trade show in Taiwan.

The technology giant plans to use the Computex show to tout a line of chips dubbed Atom, which will serve as calculating engines for so-called Nettops and Netbooks, Intel's term for extremely low-priced desktop and portable computers. The Santa Clara, Calif., company estimates the notebook variety will sell in the $200 to $350 range, while the desktop machines will cost about $200 to $300.

Some companies expected to unveil Atom-based Netbooks at the show include Taiwan's Acer Inc. and Asustek Computer Inc., which introduced a popular product called EeePC last year that helped define the category.

Intel's executive vice president and general manager of its sales and marketing group, Sean Maloney, said in an interview that he expects customers to show off at least 30 machines as part of his keynote speech Tuesday. He reiterated past company statements that supplies of the chip may be tight, because of unexpectedly strong orders. "We were surprised at how strong the demand was," he said.

Hewlett-Packard Co. and Dell Inc., the U.S. companies that hold the top two positions in global PC sales, also have plans for Netbooks, though they haven't disclosed specific plans to use the Atom chip; H-P recently introduced a model called the Mini-Note that uses a chip from Via Technologies Inc.

Intel is expected to disclose Tuesday that Atom chips for Netbooks will carry a list price of $44 and operate at 1.6 gigahertz, while Atom chips for Nettops will list for $29 each.

In other developments at Computex, Intel plans to announce what it calls the Series 4 chipset, designed to help PCs handle high-definition video, according to Erik Reid, a director in Intel's mobile-platform group. Chipsets are a class of products that work to connect microprocessors to the rest of a system.

Intel also plans to provide an update of deployments for WiMax, a wireless technology for long-distance data communications, and discuss momentum in new pocket-size products the company calls MIDs, for mobile Internet devices.

But a much bigger battle at the moment is being waged over conventional laptops, an Intel stronghold where rival Advanced Micro Devices Inc. is trying to play a bigger role. Intel had expected to deliver a long-awaited chipset for that market, dubbed Montevina, in June. But technical glitches and delays in receiving government approval for a wireless communications component recently forced the company to push back the introduction of the chipset to July 14.

That initial version of the chipset comes only with Wi-Fi short-range communication. A version that comes with chips to communicate using WiMax is expected in the second half of 2008. Though Intel had once predicted that 2008 would be the "year of WiMax," network operators aren't expected to widely offer a mobile version of the service until next year.

The delays aren't expected to hurt Intel's finances, but are clearly a disappointment. "Oh Montevina, you crafty minx. You broke our hearts with the launch delay," Craig Raymond, a senior Intel technical marketing engineer, wrote in a company blog.

But Mr. Raymond extols the capabilities of a prototype Asustek laptop with the chip technology he is trying out, communicating via a WiMax network in Taiwan. "It won't be long before we kiss and make up," he wrote.

By: Don Clark
Wall Street Journal; June 3, 2008