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Best Buy is set to launch its lowest-advertised-price laptop to date--an Acer model based on Intel's venerable Celeron chip.

Acer laptop

(Credit: Best Buy)

Thought Netbooks were as low as a laptop's price can go? Another category of ultra-low-cost laptops has quietly emerged. These aren't small or ultra-thin or frugal with power consumption. There's nothing remarkable about these laptops--except price.

Best Buy said it will start selling on Wednesday the $249 Acer laptop--the retailer's lowest-advertised-price laptop ever. The laptop comes with an Intel Celeron processor, 15.4-inch screen, 2GB memory, a 160GB hard drive, and Windows 7 Premium. The model is available while supplies last.

Currently, the lowest-priced laptop listed on Best Buy's Web site is an Acer Aspire with an Advanced Micro Devices Athlon Processor (model: AS5532-553). On Tuesday, it was selling for $329.

Why the proliferation of low-cost laptops? "It's gone from one PC per household to one PC per person," said Justin Barber, a Best Buy spokesman. "And sometimes more than one laptop per person," he said, referring to Netbooks, which are marketed as companion devices to a higher-end PC.

At the core of the low-cost Acer laptop is an Intel Celeron Processor 900--not an Intel Atom chip, which is standard fare for sub-$300 Netbooks. The Celeron is a faster design than Atom: the 900 series packs 1MB cache of cache memory and is rated at 2.20GHz.

By comparison, the Z550 Atom is rated at 2.0GHz and integrates only 512K of cache. The Atom's performance is also hampered by fundamental design constraints: it is built for power efficiency not speed.

Netbooks continue to be the most popular low-cost laptop category, however. Best Buy lists dozens of Netbooks on its Web site from Hewlett-Packard, Asus, Samsung, Gateway, Nokia, Lenovo, and Toshiba, among others. Most are priced around $350.

Dell, Acer, Intel, and others together are, in effect, creating a muddle of light laptop categories as part of a not-so-well-orchestrated marketing strategy, according to an analyst. This is expected to become particularly acute when a deluge of new Windows 7 laptops hit the market this week.

Acer 11.6-inch ultrathin looks like a Netbook but it's not.

(Credit: Acer)

Acer offered a graphic example of this recently when it introduced a small, inexpensive Windows 7 notebook--the Aspire Timeline AS1810T--that, from all outward appearances, looks like a Netbook. But it isn't--at least as defined by Intel. It's a new category of laptop called an ultrathin.

"There's a lot of confusion that Intel has created and they haven't really segmented the market that well," according to Bob O'Donnell, an IDC Research vice president.

And it gets more complicated. The inexpensive ultrathin is, in turn, competing now with the expensive luxury laptops, like the Dell Adamo, according to O'Donnell. "Ironically, what's actually happening we think is that the (ultrathin) is actually killing the high-end ultraportable," O'Donnell said.

Here's the problem: any given Windows 7 laptop with an 11.6- or 12-inch screen could be a Netbook, an ultrathin, or a high-end ultraportable, each with distinctly different price-performance characteristics not readily apparent to consumers.

"There's too many overlapping products," according to O'Donnell. Intel tried to prevent this from happening by declaring that any laptop with a screen larger than 10 inches diagonally is not a Netbook. That policy is fine in theory but does not carry over to the real world of head-butting competition among PC makers where even the subtlest production differentiation can mean a leg up on the competition.

Intel says look at performance and price. "Which offers the best performance overall? That's important," said Intel spokesman Bill Calder. "Pricing is a factor too. While some ultrathin laptops including 11.6 and higher are very affordable, none are in the $249 to $399 range that typically defines a Netbook," Calder said.

Some consumers might say it's not a big deal. But ... Read more

During Intel's earnings conference call on Tuesday, CEO Paul Otellini talked about the growth of notebook PCs versus Netbooks, and Windows 7 adoption in business, among other topics.

Otellini was quick to trumpet the fact that its mainstream notebook business beat Netbook growth. "We saw the sequential unit growth rate of notebook processors and chipsets actually exceed the growth rate of Atom processors and chipsets," he said.

Later in the call, Otellini said: "While Atom and Netbooks are important growth drivers for us, our traditional notebook business remains one of the primary drivers of revenue growth and we expect that to continue in the future."

Otellini, again in the call, expanded on this theme, adding that while Netbooks should see significant growth in 2010 over 2009, the notebook market is flourishing. "We're still bullish (on Netbooks) but what we've seen this quarter though is that the notebook market is alive and well and Netbooks are market-additive for Intel and the industry," he said. "Market-additive" is code for an ancillary product, not a mainstream product.

Intel CEO expects more attractive ultra-thin laptops in the coming months

(Credit: Intel )

He also addressed the new category of ultrathin laptops, which are inexpensive laptops--between $500 and $900--that slot in above Netbooks. "The bulk of the units that have shipped to date were single-core versions of the products. Late last quarter, we introduced the dual-core version of those products. You'll see a number of laptops show up in retail with the dual-core versions for the holiday season...more ergonomically designed, thinner, lighter."

Responding to analyst questions, Otellini also addressed Windows 7 adoption in business. "We see a lot of interest at corporations around Win 7 and the new Nehalem-based (PC models)," he said, referring to Intel's new Nehalem-based Core "i" series of processors. "They're made for each other in terms of the performance and power management and security characteristics."

He continued: "I would expect that the (corporate Windows 7) evaluation process will happen over the rest of this year and we'll start seeing corporate purchases on a refresh basis begin in 2010."

Here's a rundown of other comments:

• Consumer segment strong: "The strength in our business remains primarily consumer driven with broad-based demand across all geographies."--Otellini.
  
• Growth phase: Refuting a question about Intel becoming "smaller" next year: "We're finished with the cutting phase of our efficiency efforts and now in the growth phase of that efficiency efforts."--Chief Financial Officer Stacy Smith.
  
• Inventory hubs: At large PC customers, component inventories levels are at roughly half of the peak level late last year and approximately flat throughout 2009. Intel has a better handle on inventories now using a mechanism called inventory hubs. "We hold the inventory for our large OEM customers, who then pull inventory only if needed...This give us increased visibility into real-time production levels."--Otellini
  
• Nehalem server processors: (dual-processor). "It's not so much an upgrade cycle that's driving the volume right now, it's economics of the data center. People are looking at swapping eight to nine older-generation servers for a single Nehalem server."--Otellini.
  

Intel will accelerate development of the Atom processor, according to an executive, marking a different tack than the slow-but-steady strategy to date.

The Atom chip is used most prominently in Netbooks, and its hallmark has been power efficiency--not speed. But Intel will put more focus on speed, according to Sean Maloney, an Intel executive vice president.

"We'll spin Atom more frequently. Do more like a tick-tock on Atom. Make it faster, faster, faster," said Maloney in an interview at Intel Developer Forum last week.

The tick-tock Maloney refers to is Intel's strategy for its mainstream processors: one year--the tick--Intel delivers new manufacturing process technology; the next year--the tock--it delivers a new processor microarchitecture.

Atom is slated to get its biggest makeover to date with a technology code-named Pine Trail, due at the end of this year--or early next year, at the latest. This will put the graphics function directly on the central processing unit, or CPU--a first for Intel.

And what does this single-chip processor-graphics combination mean? "Better battery life. But performance more than anything," Maloney said.

Intel executive vice president Sean Maloney

(Credit: Stephen Shankland, CNET News)

Intel will likely ratchet up processor speeds. The Netbook-based Atom chip has been holding steady at about 1.6GHz for more than a year.

Another way to boost Atom's performance is to add processing cores. Currently, however, there are no plans to make Atom dual-core, at least not in the immediate future for the low-power Netbook market. Intel already sells a relatively power-hungry dual-core Atom for tiny desktop PCs called Nettops.

"We don't currently have plans to introduce dual-core Atom processors for Netbooks. But we will base our product road map on market needs," Intel said in a statement Monday.

This would be a tough call for Intel, as it now walks a fine line between Netbook and notebook processors. Intel already has very power-efficient dual-core notebook processors such as the Ultra-Low-Voltage Pentium SU4100 and Core 2 Duo SU7300.

These chips are now used in so-called "ultrathin" laptops that claim up to 10 hours of battery life. But these are different processor architectures and, at least theoretically, would not be able to achieve the power efficiency of a dual-core Atom. Nor would they be used in laptops as inexpensive as Netbooks.

Eric Kim of Intel shows how Intel has shrunk the size of the chip (L) from the previous generation of silicon

(Credit: Stephen Shankland, CNET News)

SAN FRANCISCO--A system-on-a-chip for TVs introduced Thursday at the Intel Developer Forum heralds a new generation of silicon from Intel.

The CE4100 packs a number features onto one piece of silicon--the same design goal for future Intel chips that will be used in smartphones and Netbooks. The chip is designed to bring Internet content and services to digital TVs, DVD players, and advanced set-top boxes, said Eric Kim, senior vice president and general manager, Intel Digital Home Group, in his keynote at IDF 2009 here Thursday.

Integration is the chip's strong suit. In addition to an Atom processor, the chip integrates a graphics processor, display processor, silicon for decoding for MPEG4 video, networking technology, and many of the typical connectors--such as USB and Serial ATA (SATA)--found on a PC. Intel says the chip can decode up to two 1080p video streams.

Intel is looking to catch the large wave of content moving to the Internet. Malachy Moynihan, vice president for video product strategy in the Cisco Service Provider Video Technology Group, who gave a presentation as part of Kim's keynote, said his company has now delivered 50 million set-top boxes, adding that high-resolution video, 3D graphics, and high-performance processors are becoming increasingly important as content becomes more multimedia rich.

Adobe Systems was also part of the keynote. Adobe Flash Player 10 will run on the new Intel silicon to "enable for the first time a wide array of Flash-based content on the television," said David Wadhwani, general manager and vice president of Adobe's Platform Business Unit.

And Intel is working with CBS on a new TV widget platform designed to help people discover programs that are relevant to their interests, according to George Schweitzer, president of CBS Marketing. (Editors' note: CNET News is published by the media company's CBS Interactive unit.)

The CE4100 chip is sampling to customers now.

As Intel readies its most potent chip yet for small devices, Apple may already be using competing technology.

Apple iPhone 3GS processor

(Credit: iFixit)

One of the themes of the upcoming Intel Developer Forum (starting Tuesday) will be the chip giant's foray into the smartphone and mobile Internet device (MID) markets. Intel's current Atom chip is fine for Netbooks but has had little impact on MIDs and zero impact on smartphones, where it is simply too power hungry to be usable.

Enter Moorestown. A much more power efficient Atom chip, due by 2010, that should find its way into high-end LG smartphones, MIDs from Asian device makers, and tablets (from HP? Dell?).

Just so happens that Apple is doing analogous chip development. When Apple acquired chip design firm P.A. Semi in March 2008 it got a team of very capable engineers that, almost certainly, are designing silicon for future iPhones, iPods, and tablets (or "media pads"--choose your nomenclature).

But it's really not even necessary to speculate about the future. The Apple chip has already arrived (see photo). Some analysts believe that the Apple-branded chip in the iPhone is a fairly unique design and that Apple is simply using Samsung as a chip "foundry" or manufacturer. That would mean Apple is already competing with Intel's Atom, not to mention the host of ARM chip suppliers such as Texas Instruments and Qualcomm.

And where might Apple supply its own silicon in the future? Beyond the iPhone--where Intel clearly has nothing to offer currently--there's the expected emerging tablet and MID markets. Make the iPod touch's screen a few inches bigger diagonally, add a few more features and you theoretically have a MID. (Some, of course, will argue that the iPod is already a MID/media player.) Make the screen even bigger (8 to 10 inches), give it more compute and graphics horsepower, and add a few more software and hardware bells and whistles, and you theoretically have a next-generation Apple tablet and/or media pad.

Those are all markets where Intel's Moorestown (and, later, Medfield) will compete.

Apple has a current market capitalization of about $165 billion (Intel's is about $110 billion). Two heavyweights with two competing visions of small devices. Will one of the big battlegrounds of the future be Apple tablets versus Intel-based tablets? Or--perish the thought--an Apple Netbook using an Apple chip instead of an Intel Atom? It's tantalizing to speculate.

And 2010 is just around the corner. It should be an interesting year for fresh new device designs and equally interesting competition between two computer industry Goliaths.

Note: Here's the official Intel description of Moorestown: "Intel's second-generation MID platform, which consists of a System on Chip (codenamed 'Lincroft') that integrates a 45nm Intel Atom processor core, graphics, video and memory controller. The platform also includes an input/output (I/O) hub, codenamed 'Langwell,' that includes a range of I/O blocks and supports wireless solutions.

(See: CNET Reporters Roundtable discussion of IDF and other Intel topics.)

Friday night at a Best Buy in Southern California--maybe not the hippest place to be, but some interesting dynamics were at work.

HP 'Mini' promo: more than a few of the newer Netbooks are not low quality

(Credit: Hewlett-Packard)

A typical flow of people passed through the laptop section in the 20 minutes I was there. Toward the end, all of the remaining customers (a few men and women, each) were marveling at all the cute, inexpensive laptops. Cute, inexpensive laptops to them, Netbooks to us in the media who like cut-and-dried categories.

I was mildly shocked to see these people ignore the 50 or so standard laptops behind them and focus solely on Netbooks. So, I began querying the sales guy and one of the customers. It came down to essentially two things: price and selection (surprise, surprise). Best Buy now has a large selection of Netbooks--10 or so on display. A far cry from the Best Buy display of six months ago: a single, tiny, neglected Asus Eee PC pushed into a corner.

And I visited a second Best Buy where a sales guy gushed about Netbooks. "They're extremely popular," he said, adding that "almost all of my customers" just want to do e-mail and surf the Web.

That is circuitous way to get to my point. The Intel Netbook is not going away and is just getting more popular as this marketing research report indicates. Apple's Tim Cook dissed Netbooks back in April for what seemed like acceptable reasons: cheap, "junky hardware" (Cook's words) equates to downmarket, shoddy products. But that Apple reasoning needs an update--the fall 2009 version: a lot of the newer Netbooks coming out now are not shoddy or cheap feeling. (And I am hereby updating my previous pessimistic take on Netbooks too per this post.)

People like cute, light, and cheap--especially in a laptop. This sentiment won't be overcome, as Intel believes, by the emerging ultrathin laptop category, which ranges from about $500 to $1,000 (formerly called CULV or consumer ultra-low-voltage). Certainly not this year. Ultrathins are not different enough in appearance from a standard laptop and not cheap enough. (And recent reports indicate that the ultrathin category is not taking off as expected.)

Intel will never admit in a thousand years that it has created, in the Netbook, a Frankenstein monster of sorts. Intel will, of course, take credit (which it should) for the creation of a new category of computing devices, but my sense is that the company is not head over heels about the Netbook business model--and this is also a reason for Apple's very conscious decision not to make a Netbook. And, as many people are predicting, its reason for pursuing a more upscale tablet-like touch device.

Best Buy has a large Netbook selection

(Credit: Best Buy)

Intel's sales chief, Sean Maloney, has intimated in the past that Netbooks are not huge money makers. Speaking about the expected emergence of the ultrathin laptop category back in May he said that this is "an opportunity for upsell. We don't need to give this stuff away. The industry doesn't need to give this stuff away. We can reach new price points and we can also get paid for it."

But there is just too much marketing momentum now behind Netbooks at large PC makers--and in retail. Hewlett-Packard, Dell, Toshiba, Sony, and Acer all are pushing Netbooks. And in Japan, easily one the largest PC markets in the world, the Netbook is a hit--despite initial resistance from Japanese PC makers--for all of the same reasons cited above: small, light, inexpensive--and add fashionable. Major Japanese tech Web sites (such as ASCII) and large retailers (like Yodobashi Camera) have a significant Netbook focus now because that's what readers and consumers are demanding.

And I just don't think performance is that much of an issue for many consumers. Some, of course, will return a Netbook because their expectations were too high (I heard this from a sales person at Frys Electronics), but a lot of people across all consumer segments (kids, students, business people) will continue to buy these things by the boatload (unless Intel intentionally sabotages the category--which I hope Intel is savvy enough not to do.)

Apple's products and marketing are good but not infallible. And the lack of a Netbook may come back to bite Apple at some point. Maybe not tomorrow. Maybe not next month. But maybe next year. One of the Best Buy customers eying a Netbook made a comment that was a powerful counterpoint to all the Apple Mac-PC ads. To paraphrase: "You have to pay an arm and a leg for Apple (pointing to the Apple corner), I'm trying to make a practical business decision here."

IBM scientists have imaged the chemical structure of an individual molecule, increasing the possibility for creating electronic building blocks on the atomic and molecular scale.

By using an atomically sharp metal tip terminated with a carbon monoxide molecule, IBM scientists were able to obtain an image of the inner structure of the molecule. The colored surface represents experimental data. The model below shows the position of the atoms within the molecule.

(Credit: IBM)

Scientists In Zurich, Switzerland, have, for the first time, imaged the "anatomy," or chemical structure, of an individual molecule with "unprecedented" resolution, using noncontact atomic force microscopy (AFM), IBM said Thursday. Resolving individual atoms within a molecule has been a long-standing goal of surface microscopy, according to the computer company, which has a research and development program dating back to 1945.

This research will be essential for building computing elements at the atomic scale that are vastly smaller, faster and more energy-efficient than today's processors and memory devices, IBM said.

The research is reported in the August 28 issue of Science magazine.

Though in recent years progress has been made in research of nanostructures on the atomic scale with AFM, imaging the chemical structure of an entire molecule has never been achieved with atomic resolution, according to IBM.

The atomic force microscopy was done in an ultrahigh vacuum and at very low temperatures (5 Kelvin equals minus 268 degrees Centigrade or minus 451 Fahrenheit) to image the chemical structure of individual pentacene molecules. Pentacene has a crystal structure that gives it properties as an organic semiconductor.

Scientists were able "to look through the electron cloud and see the atomic backbone of an individual molecule for the first time." This is roughly analogous to X-rays that pass through soft tissue to enable clear images of bones, IBM said.

The Science magazine article follows another piece published two months ago in the June 12 issue of the magazine covering the "determination of atomic charge states." The results discussed in both of these articles will "open new possibilities for investigating how charge propagates through molecules or molecular networks," IBM said.

Understanding the charge distribution may lead to building computing elements ... Read more

Updated at 1:30 p.m. PDT: adding information about Core i7, i5, and i3 branding.

Intel's upcoming "Arrandale" will be the first highly integrated chip of its kind from Intel and is expected to run the gamut of laptop designs, from ultrathin to mainstream.

Dell ultrathin Adamo: a category of laptops that will likely use a number of different Arrandale chips

(Credit: Dell)

Due by the fourth quarter, it will be the first Intel product to put two processor cores and a graphics function together in the same chip package. Intel covered the underlying architecture in a presentation at the Hot Chips conference in Palo Alto, Calif., this week and in a recent blog described the design, saying it "will be the basis of all upcoming new Core chips (Core i3, i5, and 7) over the next few months."

Arrandale will come under the Core i3, Core i5, and Core i7 brands, using the chipmaker's most advanced 32-nanometer technology (Intel chips are currently built on a 45-nanometer process) and will populate consumer and business laptops.

The compact chip, however, is not without its challenges. "A high level of integration is always a compromise. There's never a free lunch," said Ashok Kumar, an analyst at investment bank Collins Stewart. "It's a question of how much performance you have to compromise to get that level of integration and low power consumption."

"There won't be a significant jump in performance, but price and power consumption will be lower," said Jon Peddie of president and founder of Jon Peddie Research.

Last month, Japanese-language technology Web site PC Watch published specifications for Arrandale and other upcoming Intel processors that were, PC Watch says, obtained from an OEM (original equipment manufacturer) computer manufacturer. It shows Arrandale coming in mainstream as well as low-voltage and ultra-low-voltage versions. The latter two classes of chips have typically gone into upscale svelte designs such as the Dell Adamo and Apple MacBook Air.

Arrandale-based chips, however, are expected to quickly go downmarket and bring Intel's new Core i "Nehalem" microarchitecture to the new category of laptops called ultrathins, which resemble the MacBook Air and Dell Adamo but are about half the cost.

A separate series of new chips for Netbooks, codenamed Pine Trail, will also appear by early 2010 and feature a high level of integration.

The first Core i7 mobile processors will arrive by September or October. This quad-core series, codenamed Clarksfield, will be for high-end gaming laptops and mobile workstations. (For the codename buffs who actually keep track of these things, Calpella is the platform for Clarksfield, Westmere is the platform for Arrandale.)