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Intel Bullish about Tablets, Silent on Handhelds

As the age of cellular phones and personal computers is getting overly saturated, leading chip manufacturer Intel has begun putting more importance to the up-and-coming category of tablet devices.  In its third quarter financial results report, the company placed tablets far higher in its agenda compared to previous quarters, which may indicate that Intel is indeed considering the significance of the tablet and other forms as a major factor in driving growth in their business.  This news is also reflected in the latest figures for the baseband chip sector, which reports the highest levels of growth on non-handset wireless products as well. The question now is whether Intel’s Atom can be at par with other processors that are based on ARM, as well as Infineon, as the company plans to compete in the baseband market again.

The tablet market

Intel seems to have no choice but to engage in the tablet market despite what analysts have said that is indeed coming true, that tablets have “cannibalized” the market for PCs, which is, of course, Intel’s major client.  Paul Otellini, Intel CEO, while reporting third quarter figures, promoted the tablet format and named it as a growth sector and priority for his company.   He adds,”We will use all of the assets at our disposal to win this segment.  We fully expect to participate fully and broadly in this market.”  He also commented that there will be a “slow and steady” upgrade cycle in PCs in general and a modest growth for other hybrid implements like netbooks.

The figures demonstrate that price pressure on Atom, aside from the competition arising from other ARM-based products that is affecting Intel revenues.  Atom’s revenues, despite the push for its low power processor decreased by 4 percent compared to second quarter figures.  On the other hand, PC and server microprocessors had a sequential growth and record revenues of 3 percent.

As with the plans with tablet devices, Otellini said that the next generation of Atom processors will definitely be developed in a lot of products, including new tablets that will run on any system, may they be Windows, Android, or MeeGo.  As for handsets, Otellini did not comment much, which may be because Atom has had difficulty penetrating into this market.

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