Nanotech - The Circuits Blog

The new moniker "Atom" sets in marketing stone the Intel brand for small devices. I'll skip the banalities about Atom silicon being crucial for Intel's future and just pose a question: Can Intel spur innovation in ultrasmall devices the way it has in the PC and server industry?

I won't hazard any rash predictions but will make a few observations about the current landscape.

Intel Atom processor

(Credit: Intel Corp.)

First, a little recent history. The ultramobile PC (UMPC) based on Intel's first-generation processor (the A110) for small devices has not exactly been the market sensation that the iPhone has. The Samsung Q1 and the Asus R2H are two examples of products that never really took off. As if to recognize this mistake (and confuse people in the process), Intel has stopped referring to this category of gadgets as UMPC and now calls it the Mobile Internet Device or MID.

This underscores the pitfalls and potential for Intel. The pitfalls: consumers will forever unfavorably compare the UMPC and MID to the more feature-rich notebook PC or, conversely, to the smaller, cheaper cell phone. The potential: a new category of computers spearheaded by a device with an iPhone-like following.

Enter the Atom-branded low-cost platform for ultraportable devices. Asus's popular Intel-based Eee PC is already demonstrating the potential here. So much so that a Sony vice president recently cited the Eee PC as a threat. (He depicted it as causing "a race to the bottom" because of its low price.) The XO laptop offered by the One Laptop Per Child organization is another example. (It uses an AMD Geode processor.) Both are priced around $300 and both are Internet-centric devices that offer the same wireless capabilities of more expensive laptops.

For smaller MID-like devices, such as the iPhone and Nokia N810, success is less certain. Many of the scores of pocket-sized gadgets on the market use processors based on the tried-and-true ARM design. Intel won't displace ARM anytime soon. But these devices are proprietary, which may leave Intel an opening. Because Intel's Atom processor is compatible with the Core 2 Duo instruction set, developers of small devices have a common platform to target.

"This is our smallest processor built with the world's smallest transistors," Intel Executive Vice President and Chief Sales and Marketing Officer Sean Maloney said in a statement. "This is...a fundamental new shift in design. We believe it will unleash new innovation across the industry."

This is probably true. But Intel has a long way to go in a crowded market that bears little if any resemblance to the PC industry, where the chipmaker competes relatively comfortably with only one other company (AMD). There's also a long wait for Intel's Moorestown, the next generation of small chips for small devices due in 2009 or 2010. The great expectations for Moorestown almost overshadow the current Atom technology. Moorestown will not only be more power efficient but more highly integrated: a system-on-chip (SOC) design combining the CPU, graphics, and memory controller onto a single chip.

Update: Atom brand segmentation:

One segment will be pocket-sized gadgets, dubbed MIDs. The maximum screen size for MIDs will be 7.5 inches diagonal. In order to get the "Centrino Atom" sticker, the MID must use the Poulsbo chipset, which includes integrated graphics. (Correction: wireless--both Wi-Fi and Wimax--are on a separate chip.) The Atom processor targeted at this market was previously code-named "Silverthorne."

The second segment will be ultra-low-cost notebooks and desktops. Intel calls the notebook segment Netbook. The desktop, Nettop. The Atom chip addressing this segment was previously known as "Diamondville."

Atom processors are expected to ship this spring.

Intel's upcoming low-cost Diamondville notebook processor will break from Intel's multicore strategy of the last few years and be primarily a single-core processor.

Small notebooks like the Eee PC will use Diamondville.

(Credit: Asus)

In this respect Diamondville is not that different from Celeron, a long-standing design (introduced in 1998) that has been exclusively single-core until very recently. The reason for the single-core strategy is simple: With Diamondville, Intel has a "fanatical focus" on low power and low cost, according to Dean McCarron, founder and principal of Mercury Research. A single core means fewer transistors and lower power consumption.

Diamondville is not Celeron, however. "It's a clean sheet of paper design," McCarron said. It is a tiny 45-nanometer processor that employs a simpler design (called an "in-order pipeline") than standard Intel processors, as spelled out in an ISSCC presentation (PDF) earlier this month. Diamondville also has lower-cost packaging than the Silverthorne processor, which Diamondville is derived from.

Because of this extreme emphasis on cost, Diamondville will appear in ultra-low-cost notebooks and to a lesser extent--at least initially--in desktops. Intel refers to the low-cost notebook design as "netbook" and estimates the pricing for these devices will go as low as $250. The initial thrust by PC suppliers such as Hewlett-Packard and Dell is expected to be in emerging markets. Performance is expected to be commensurate with the Pentium-M processor (a single-core chip first released in 2004).

There will be one exception to the single-core designs: a desktop version of Diamondville will be dual-core, according to a source close to Intel. This is backed up by a recent report in Taipei-based DigiTimes that refers to a Diamondville platform as "Shelton'08." That platform will come with two Diamondville processor models: a dual-core CPU, whose specifics are currently unknown, and the 230, a single-core CPU running at 1.6GHz with a 533MHz front-side bus and 512KB cache. The Shelton'08 for notebooks will include a single-core Diamondville, the N270.

On another front, Intel is expected to rebrand the Menlow platform in the very near future, according to sources familiar with Intel's strategy. The Menlow platform is comprised of the "Silverthorne" processor and the "Poulsbo" chipset from which Diamondville is derived, as mentioned above. Centrino is a possible candidate for a part of the brand name. This is a name that carries significant brand equity and may also be applied to the upcoming Montevina platform as "Centrino 2," according to reports earlier this month.

Advanced Micro Devices may have been demoted on Dell's Web site (though three AMD-based notebook models are still listed). But its chips aren't collector's items yet.

A quick inventory of Best Buy, the largest U.S. electronics retailer, is telling. A search on the reseller's Web site greets you with a page full of AMD-based notebooks. Ten to be exact. Some are fairly attractive too. Many are models in Dell's svelte Inspiron line. (Correction: not Dell's XPS line). Granted, Best Buy may not have the turnover of Dell's Web site but it's not Radio Shack either.

HP dv9715

(Credit: Best Buy, AMD)

Then there's Hewlett-Packard. If the perception is that AMD is fading at Dell, that's not the case (at least not yet) at the largest PC supplier in the world. "AMD represents a good value from a price/performance ratio," an HP spokesperson said.

In addition to the AMD-based notebooks available on HP's home-and-small-office site, a crush of systems is listed on Best Buy. If you're keeping score: AMD 9, Intel 4. Go to Staples online, and it's nothin' but AMD in HP.

And let's not forget Toshiba. In addition to listing seven AMD-based notebook on its Web site, almost half the Toshiba notebooks at Best Buy use AMD chips.

What about the brick-and-mortar Best Buy? At a Southern California Best Buy (just south of Orange County), there were 34 notebooks on display. Exactly half (17) of these used AMD chips (mostly dual-core Turion processors). And most of the AMD systems were placed at the front where people browse. But here's the catch. The salesman was pitching Intel. He volunteered that Intel's Core 2 beats AMD's dual core. "Intel runs cooler too," he said. And he had nothing positive to say about AMD. That's a problem.

Which brings us to another problem AMD may face. Last fall, Intel CEO Paul Otellini said in a conference call that his company has "walked" away from "a lot of low-end business" in mobile and desktop because it's not profitable. This is a real danger for AMD: getting relegated to the budget bin where profit margins are typically thin. (Many of the AMD systems are below $900.) But that story--whether AMD's profit margins are in fact razor thin or not--will be told in upcoming earnings statements.

The bigger problem may be Intel's Silverthorne and its low-cost x86 derivatives. These chips are designed specifically to compete at the very low-end--and make money there--unlike current Intel processors. Though nobody knows at this point whether Silverthorne will be competitive or not, its mantra is worth noting: low cost is good. "Because they are so small, literally thousands of them can be cut from 300mm wafers at 45nm. Thus, their economics are incredibly good," said Roger Kay, an analyst at Endpoint Technologies Associates.

And Otellini said more or less the same thing during Intel's fourth-quarter conference call. "We're embracing this trend with Silverthorne and will take the pricing down even lower...A tailored product for ultralow cost notebooks is a new thing for us," he said.