The PC industry is going through a very, very dark period right now, with the netbook being the only bright spot on many manufacturers’ balance sheets. Since the saving grace of the industry is powered by Intel’s Atom chip, it shouldn’t come as a surprise that it’s also the only positive element in Intel’s abysmal quarterly results.
I won’t bore you with the figures, but suffice to say that Intel’s results over the 2008 final quarter are very, very bad. “The pace of the revenue decline in the quarter was dramatic,” confessed Paul Otellini, Intel’s CEO, during a January 15 conference call. “These numbers resulted from reduced demand and contractions across the supply chain. While inventories have declined, we are assuming further reduction in [the first quarter of 2009].” In other words: shit, meet fan. Despite the dramatic results and gloom prospects, the company will continue to invest in new technology during 2009, such as the tansition to 32nm.
The bright spot on the balance sheet is the Atom processor, revenue form which went up 50% between the third and fourth quarter of 2008, reeling in USD 300 million in revenue for the chip giant. With the popularity of netbooks still on the rise, Atom seems to be the chip on Intel’s shoulder (I hereby accept the 2009 award for lamest in-story joke on OSNews).
Otellini waved concerns regarding the Atom chip cannibalising sales of more expensive Intel processors away. “While there is some cannibalization, the data suggests that the vast majority of netbooks sales are incremental,” he said. The Atom chip is creating its own market, without affecting sales of other Intel processors.
Intel is expected to release updated Atom chips in the second half of 2009.
Just as the catastrophe that wiped out the dinosaurs made way for smaller, more efficient lifeforms like us, so it seems the recession may be clearing away the cruft from the markets to make way for more innovative products, better adapted to the world as it is today.