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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.
  

SAN FRANCISCO--Dell is launching its first laptops with Intel's new Core i7 processor for laptops.

The Intel "Clarksfield" Core i7 processor boasts four cores and is the chipmaker's first mobile chip based on its new Nehalem microarchitecture. Most Intel processors will move to this design in 2010.

Dell is trying to take an early lead in embracing the new technology. Dell's flagship product for the mobile Core i7 will be the 15-inch Alienware M15x gaming laptop. Dell is also offering the chip as an option on other laptop models worldwide, including the Studio 15 and Studio 17.

At the Intel Developer Forum today, David Perlmutter, executive vice president and co-general manager of Intel Corporation's Intel Architecture Group, is discussing Intel's mobile Nehalem platform that also includes a future chip codenamed "Arrandale," which will integrate graphics into the CPU, or central processing unit.

The Core i7 is packaged with the Intel PM55 Express chipset--companion silicon that assists the processor in communicating with the rest of the system. Two features that differentiate Core i7 from Core 2 Duo processors (the most-widely-used chips in laptops today) is Turbo Boost and Hyper-Threading. Turbo Boost speeds up and slows down individual cores to meet processing and power-efficiency needs, respectively. Hyper-Threading can double the number of tasks--or threads--a processor can execute.

The Alienware M15x configurations include the Intel Core 920XM CPU and 1GB NVIDIA GeForce GTX 260M graphics chip.

The Alienware M15x will come with Intel's first Core i7 mobile processor.

(Credit: Dell)

The Dell Studio 17 will feature the Intel Core i7 720QM 1.6GHz processor, a 1GB ATI Mobility Radeon HD 4650 graphics chip, 17.3-inch HD+ (1600x900) display, and 9-cell battery.

The Studio 17 starts at $1,099.

Dell will also offer the Studio 15 with Core i7. Configurations include Core i7 720QM 1.6GHz, 512MB ATI Mobility Radeon HD 4570 graphics chip, and 4GB of memory. Pricing start at $999.

And the Dell Studio XPS 16 will come with a Core i7 option, with a starting price of $1,249, Dell said.

Advanced Micro Devices will try to inject new life into the lackluster desktop PC market with the first sub-$100 quad-core processor aimed at Windows 7--and Intel.

It's all about mobile computing today. But AMD's Athlon II X4 quad-core processor will give consumers something to consider on the desktop when Windows 7 ships in October. The chip is priced at $99 for "system builders," according to AMD.

"The introduction of the new AMD mainstream desktop platform coupled with Windows 7, allows...a faster, higher performing experience at an attractive price point," said Mike Ybarra, general manager of Windows Product Management at Microsoft, in a statement.

Some reviewers were quick to praise the chip. "It's often hard to get excited about low-end and mainstream hardware," wrote technology Web site Hot Hardware on Wednesday. "However, AMD's new quad-core Athlon II X4 processors are something we can definitely get excited about."

AMD is trying to create some buzz for Windows 7 desktop PCs

(Credit: AMD)

"AMD didn't just deliver on price, they also managed to produce quite a competitive product that was able to keep up with more expensive processors like Intel's Q8200 and AMD's own Phenom IIs," the review said. The closest competing quad-processor from Intel is the Core 2 Quad Q8200, priced at around $150 at resellers.

Other reviews, however, were more Tepid. "The Athlon II X4 620 is just $20 cheaper than the Phenom II X3 (triple core)...in terms of performance the triple-core chip will likely be faster than the Athlon II X4 620 in most cases, as it is also clocked 200MHz higher," TechSpot wrote.

Beyond price, AMD is also claiming energy efficiency, saying that the use of the latest 45-nanometer manufacturing process allows it to draw less power than a standard 75-watt light bulb. Until this year, AMD had been building its processor on a 65-nanometer process. Typically, the smaller the geometries of a chip, the faster and more power efficient it is.

The quad-core processor is used in combination with the 785G chipset, which integrates ATI Radeon HD 4200 graphics silicon. The pricing of the chipset is separate from the processor.

Pricing for consumer-ready systems based on the Athlon II X4 processor were not immediately available.

ZT Systems will be selling systems later this month through Sears.com and Buy.com that are expected to be priced around $500, according to AMD spokesman Matt Davis. Other resellers, such as iBuypower and CyberPower, are also expected to bring out systems.

Updated at 2:15 p.m. PDT: adding information about Dell system.

The main message of the new Core i5 chip is simple: it's cheap--even cheaper than Intel chips based on older technology.

(Credit: Amazon)

The i5, which brings Intel's new "Nehalem" microarchitecture into the mainstream PC market, immediately makes many, if not most, of the older desktop processors obsolete. Consumers need look no further than pricing on sites like Amazon. The i5-750 lists for $250, while the older--based on Intel's last-generation "Core 2" microarchitecture--Q9650 lists for $319.

The official pricing from Intel in quantities of 1,000 units makes the price gap even more stark: $196 for the i5 and $316 for the Q9650.

"The new Core i7's and Core i5's bring pricing to more mainstream levels, with the Core i5-750 at a 1KU (1,000 units) price of $196, which is well below the Core 2 Quad Q9650 at $316," said Intel spokesman George Alfs.

"We are very serious about bringing all new Core processors to new price points and you'll see this trend continue with Westmere," he said, referring to Intel's upcoming processors based on a next-generation 32-nanometer manufacturing process.

Comparing the old with the new, some consumers might point out that the older Q9650 has, for example, more on-chip memory and a higher clock speed than the Core i5. But the writing is on the wall: consumers will almost always opt for new over old when new is less expensive.

On Tuesday, Dell began offering the Studio XPS 8000 tower with the Core i5 starting at $799 and packing 4GB of "Dual Channel DDR3 memory" and a 500GB hard disk drive, among other features. Adding a 20-inch monitor hikes this to $979.

The message is more muddled, however, for the updated Core i7 processors because they maintain the same "i7" identifier as their predecessors--first launched in November--but offer different features that are not readily apparent to less-sophisticated buyers and potentially vexing for some savvy consumers.

"It gets confusing for the more technically knowledgeable buyer, and for us as system builders," said Kelt Reeves, president of enthusiast PC maker Falcon Northwest. "Buying a Core-i7 950 model? Well then you can have a maximum of 12 gigs (gigabytes) of triple channel memory and you buy your memory in sets of 3 sticks. Buying a Core i7-870? Well then your memory is installed in pairs and the max you can have is 8 gigs," he explained.

Reeves continued. "For instance, if you're a heavy Photoshop user having 12 gigs of the fastest memory might be very important to you," he added, saying in that case a consumer would want to opt for a Core i7 900 series over the newer 800 series.

There are other gotchas too. On the i5 processors a feature called hyperthreading is not included, as CNET's Rich Brown pointed out Tuesday. Hyperthreading effectively doubles the number of tasks--or processing threads--a chip can do. "Heavy multitaskers and those who use multithreaded software will feel the loss here," Brown said.

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.)

Nvidia is readying silicon that would work with Intel's newest processor design, according to a report. Intel claims Nvidia does not have the legal rights to make companion chips for its newest processors.

In February, Intel alleged in a lawsuit that the 4-year-old chipset license agreement with Nvidia does not extend to Intel's future-generation processors with "integrated" memory controllers, such as its "Nehalem" Core i series of processors.

A chipset is companion silicon to the main processor. Integrated memory controllers are built into the processor itself to increase performance between the processor and memory.

According to a report on Chinese-language Technology Web site HKEPC, Nvidia is planning to bring out a MCP99 chipset that supports Nehalem processors and Intel's Direct Media Interface, or DMI. Nvidia cited DMI back in February as a technology that Intel was trying to prevent it from using.

Despite the report's claims, it is not clear yet whether Nvidia would in fact bring out a chip before the legal matter is settled with Intel.

Nvidia had no comment on the report.

Nvidia's current 9400M Intel-compatible chipset, which is used with Core 2 architecture-based processors, has been successful. It is used in Apple's MacBook and Toshiba's Qosmio lines, for example, and in Netbooks that use the Atom processor.

During Nvidia's July 26 earnings conference call, in response to an analyst's question about building chipsets for Intel's Nehalem processors, Nvidia CEO Jen-Hsun Huang said: "We're not necessarily building chipsets for future Intel buses. We've not commented anything on that and so you are just going to have to wait to see what we come up with," he said. "Our company is...pretty darn clever. There is a lot of ways to skin the cat," he said.

Intel said the matter is being left to the courts. "We tried many times to resolve the conflict but we couldn't resolve it. So we asked the courts to," said Intel spokesman Chuck Mulloy. "By the time something comes to market, hopefully we'll have some resolution," Mulloy said.

Updated at 3:45 p.m. PDT: adding comments from earnings conference call.

Intel on Tuesday posted a second-quarter loss of $398 million, stung by a fine imposed by the European Union, but the chipmaker is optimistic about the second half of the year as it beat analyst estimates.

The loss of 7 cents a share compares with a profit of $1.6 billion, or 28 cents a share, reported a year ago. Without the $1.45 billion EU fine, Intel had a profit of $1 billion, or 18 cents per share. Analysts had expected a profit of 8 cents per share.

"Intel's second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half," said Paul Otellini, Intel CEO in a statement.

In an earnings conference call Tuesday afternoon, Otellini qualified this statement somewhat, saying that there won't be a "recovery to prior levels."

Revenue was $8 billion, down from a year-earlier $9.5 billion. Revenue from Intel Atom microprocessors, used widely in Netbooks, and chipsets was $362 million, up 65 percent sequentially.

Gross margin, a crucial profit indicator, was 51 percent, up 5.5 points sequentially but down from 55.4 percent posted a year earlier.

The replenishment of inventories by customers was a positive sign, said Stacy Smith, Intel's chief financial officer, speaking during the conference call. "In anticipation of a seasonally up second half, the supply chain (buyers of Intel chips) began refilling inventory positions that had been depleted over the past two quarters," Smith said. "As a result, we experienced better-than-expected demand for microprocessors and chipsets."

"Consumer purchases led the way," Otellini said in the conference call, referring to consumer laptops that saw growth.

Corporate enterprise business, however, was "weak," Otellini said. Though the Intel CEO expects companies to update aging computers, "we're not counting on that in large measure in 2009," he said. Dell executives said Tuesday that global technology spending will likely remain weak for the near term as companies delay computer purchases, according to an AP report.

Otellini said he had "no opinion" on the impact of Windows 7--due later this year--in the consumer market but expected businesses to "get ready for buying next year."

Market researcher iSuppli said Tuesday that for the first time since the Dot-Com bust of 2001, the global PC market will suffer a contraction in unit shipments in 2009, due to a combination of falling IT spending and plunging sales of desktop computers.

Global PC shipments are expected to decline to 287.3 million units in 2009, down 4 percent from 299.2 million in 2008, iSuppli said.

"If you look across the pond in Europe demand is decidedly weak," said Ashok Kumar, an analyst at investment bank Collins Stewart. "And in China all the anecdotal data points are no better than tepid. None of the geographies are firing," Kumar said.

Hewlett-Packard was one of the early trendsetters in the ultrathin laptop market with its Voodoo design. But the product has languished for more than a year. What happened--or what will happen--isn't clear.

The ultrathin laptop market is hot and one of the most visible laptop segments today. And activity in this segment has spiked recently in the wake of a raft of new, inexpensive thin laptops from MSI, Acer, and Lenovo, using low-power Intel chips.

HP's Voodoo Envy was a trendsetting ultrathin laptop but it hasn't been updated in a year.

(Credit: Hewlett-Packard)

The Apple MacBook Air and Dell Adamo are two of the most prominent designs. The Air has now been refreshed twice. Dell's svelte Adamo was announced in March, complementing its ultrathin business laptop, the Latitude E4200.

But the razor-thin 0.7-inch-thick Voodoo Envy 133--first announced in June 2008--has stood still. ... Read more

Intel is launching its line of processors for thin, inexpensive laptops at the Computex tech conference in Taipei. Intel marketing chief Sean Maloney talked about this in a phone interview.

"It's clear that people like devices to be thin and light," said Maloney, who was speaking from the Computex conference in Taipei where he will be giving a keynote on Tuesday.

"We've really taken that to heart and come out with a complete top-to-bottom range of microprocessors that enable radically longer battery life and much smaller designs," said Maloney, referring to Intel's new lineup of consumer ultra-low-voltage (CULV) processors.

Maloney continued. "There are a lot of computers being announced here (Computex) that look like conventional notebooks in terms of how wide the screens are, but they're super-thin, the performance is very good, and they get up to nine hours battery life without a big, fat battery at the back," he said.

MSI X340 X-Slim laptop is one of the first CULV laptops

(Credit: MSI)

"It's a big change for industry. It means the technology weaves its way into your life more because you're going to have all-day notebooks," Maloney said.

The new processors will encompass the Core 2, Pentium, and Celeron processor architectures, according to Maloney.

Prices for these new laptops will start at $399 and range up to $2,000 in some cases, Maloney said.

And will laptops based on these chips impact the sales of Netbooks? "I don't think so," Maloney said, but added: "It's a loser mentality to not develop one segment because you're worried about the other."

Maloney continued. "The demographics (for Netbooks) that's completely untouched is kids between the ages of 7 and 12. So, the Netbook market is still at a very early stage," he said.

In addition, Intel unveiled the Mobile Intel GS40 Express Chipset for the new ULV-based laptops. This "value" chipset enables ULV-based laptops to support HD (high-definition) playback, Windows Vista Premium support and native support for integrated HDMI (High-Definition Multimedia Interface).

Wireles options will include embedded WiMAX or Intel "My Wi-Fi" technology. My Wi-Fi transforms a laptop into a WiFi personal area network, connecting directly with up to eight Wi-Fi-certified devices, according to Intel.

Though a crush of new thin laptops are expected, the MSI X340 is one of the first. The X340 has a 13.4-inch screen, weighs 2.86 pounds, and measures .78 inches thick.