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During Intel's earnings conference call Tuesday, CEO Paul Otellini said inexpensive "ultra-thins" will give users what they're missing in Netbooks, a theme that the chipmaker has been reiterating in various forums lately.

Acer Aspire Timeline ultra-thin laptop

(Credit: Acer)

Intel continues to try to maneuver this new and more profitable category of laptops into territory where Netbooks continue to hold mindshare. Ultra-thins are low-cost laptops, typically with 13-inch screens, based on Intel's ultra-low-power (ULV) chips. Netbooks have screens usually no larger than 11 inches and use Intel's lower-cost, lower-performance Atom processor.

Echoing prior comments by other executives, Otellini said that ultra-thins address the Netbook's shortcomings. "When people try to do 3D games on these things (Netbooks) or try to run their office applications on them, they tend to think it's a bit slow and that isn't just the processor, it's the entire architecture," he said in response to analyst's question during the conference call, which was streamed on Intel's Web site.

"Now, if you want a thin and light notebook, you don't have to just pick a Netbook. You can pick an affordable notebook that has more functionality," Otellini said.

Well-established consumer perceptions of Netbooks and the higher prices of ultra-thins, such as the $699 Acer Aspire Timeline, makes the latter a challenge to position in the marketplace.

"When we first released our ultraportable (ultra-thin) a lot of people looked at it and said, 'oh it's Netbook,'" said Kelt Reeves, president of enthusiast PC maker Falcon Northwest. "No, it's close to a Netbook in size but it's much, much more capable," Reeves said, addressing user misconceptions.

Windows 7 may not go very far in correcting all the confusion. "Windows 7 runs well even on a $199 Netbook," said Ashok Kumar, an analyst at investment bank Collins Stewart. Kumar said Intel may continue to have trouble managing consumer perceptions of Netbooks and ultra-thins.

Otellini also revisited the subject of cannibalization--that is, the tendency for Netbooks to take market share from more mainstream laptops. "We're talking about a total cannibalization that's probably no more than 20 percent," Otellini said, in response to another analyst question.

The Intel CEO also said that Netbooks may become increasingly popular as a wireless 3G device sold by telecommunications companies. "I think in 2010 that's likely to be a large part of the business...There was a Best Buy, Sprint Netbook ad last week at $0.99 if you signed up for two years...And you'll start seeing more of that," he 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

Updated at 1:45 p.m. PDT with additional comments about Moblin market share.

On Tuesday, Intel released information on its next-generation Atom silicon and the next version of its Linux operating system for Netbooks.

Noury Al-Khaledy, general manager of Nettop and Netbook Computing at Intel, announced a technology platform called "Pine Trail" that--at the risk of confounding readers with similar product names--uses a new Atom processor dubbed "Pineview."

Intel announced the Moblin v2.0 Beta Tuesday

(Credit: Intel)

Essentially, what all of this means is that Intel will move more features onto the "Pineview" Atom processor that are currently in the surrounding chipset. The graphics function and so-called memory controller--which connects memory with other parts of the system--will now be on the same piece of silicon as the processor.

Other functionality--the so-called I/O hub--will remain on a separate chip.

"We have a processor, we have a chipset, and we have an I/O hub. What we've done is reduce that three-chip partition to a two-chip partition," Al-Khaledy said.

The new Atom technology will launch in the second half of this year, Al-Khaledy said.

The goal of integration is to reduce power consumption and increase performance in Netbooks--which are small, inexpensive laptops designed for Web browsing, email, and less-demanding media applications.

Intel also announced the Beta version of the Moblin version 2.0 Linux operating system, which is targeted at Atom processor-based Netbooks, handhelds, Nettops (Atom-based desktops), as well as other markets such as automotive. "We're doing Moblin to unify Linux across all these segments," said Doug Fisher, general manager at Intel's software and services group.

Moblin 2.0 includes a new interface called the M-zone, which replaces the desktop and is "the entry point to the Netbook and Nettop," according to an Intel statement. This new interface is aimed at improving social networking and media--audio and video--consumption.

Intel did not disclose what PC makers may use the operating system--which will compete with Windows 7--but said Acer and Asus have used Linux in the past for Netbooks.

"We're seeing 20, 25 percent Mobilin share in Netbooks and Nettops," Al-Khaledy said. Much of the Netbook market today uses Windows XP and is expected to adopt Windows 7 when it comes out later this year.

Moblin 2.0 Beta is available for immediate download here.

Netbooks had a rocky start last year in some markets, Intel's marketing chief said at the Intel investor meeting Tuesday.

"In the first period--June, July, August of last year--there were some in the retail channels that were shipping (Netbooks) as notebooks," Sean Maloney said in a question-and-answer session that was streamed over the Web. "They were running ads that had a continuum of notebooks and had this Netbooky thing in there--it was called a notebook. They had very high return rates and a couple of these guys had return rates in the 30 percent range, which is a disaster."

Maloney continued. "So we gently went back to some of those chains and said if you segment them differently and state up front what they do and don't do, things will be healthier. You've seen some of the European channels saying this (Netbook) product does not do X and being very black and white and very clear."

Intel's marketing chief Sean Maloney showed this slide Tuesday and did a live demonstration showing what a Netbook can't do.

(Credit: Intel)

At the investor meeting, Intel demonstrated on stage the performance gap between a Netbook and a mainstream notebook. In the demonstration, a Netbook and a notebook ran the same high-definition video of the NBA basketball playoffs. The video on the Atom processor-powered Netbook was jerky and dropped frames, while the Core 2 chip-based notebook's video was smooth.

The point was obvious: the Netbook's Atom silicon falls short in performing some tasks that a mainstream notebook handles with relative ease.

Along these lines, it also became clear at the meeting that there is a struggle brewing to clearly define to consumers the difference between Netbooks and upcoming ultra-thin notebooks, also referred to as the Consumer Ultra-Low-Voltage or CULV category of laptops. CULV notebooks--due in June--are expected to be priced in a market segment just above Netbooks.

Intel executives were peppered with questions from the audience--mostly representatives from Wall Street firms--about Netbooks. One audience member wondered whether Intel "had considered doing an informational advertising campaign" and asked: "Do you find that at all necessary to clear up some of the misapprehensions about what you can and cannot do with these devices (Netbooks)?" This question elicited the response from Maloney quoted above.

Apple COO Tim Cook's recent comments about Netbooks may reflect an incipient movement to look beyond this category of laptops--now more than a year old. The comments also echo lingering disaffection with the Netbook business model. Sentiment that may not be that far removed from Intel's internal thinking.

Toshiba's first crack at a Netbook was hardly an endorsement of the category--the lackluster design was officially only available in Latin America

(Credit: Brooke Crothers)

This New York Times blog does a good job of dispelling any ambiguity about Cook's comments when it says that "contempt may be too kindly a term" to describe his attitude toward Netbooks.

Cook joins a small chorus of less blunt but equally disdainful companies. Toshiba initially resisted Netbooks and in conversations I had with Toshiba at the Consumer Electronics Show (CES) in January (where its Netbook offering had been relegated, quite intentionally, to an easy-to-miss corner of its sprawling booth) they clearly were not enthusiastic about (if not disdainful of) the category.

Toshiba, caving to pressure in its home market (Japan) from Acer and Asus, has since come out with a redesigned Netbook but has yet to offer anything officially in the U.S. market--more than a year after the Atom processor was launched.

And in case anyone misses the irony. Toshiba practically invented the laptop category and, to state the obvious, is one of the largest laptop vendors in the world.

And Sony has gone out of its way to say that its Netbook-like notebook is not a Netbook--and priced it accordingly.

Advanced Micro Devices has been more outspoken than most. Their contempt, to a large extent, is a given since they are Intel's chief rival. And, unlike Toshiba and Sony, they're not a customer of Intel's and don't have to couch their disdain in diplomatic language. (Skeptics will cite a host of other reasons too: AMD's lack of R&D funds to develop an Atom equivalent, for one.).

That said, in conversations I have had with AMD (including CEO Dirk Meyer), they seem to genuinely believe that Netbooks--as defined by Atom--are not going to be around for the long haul. In short, like Apple's Cook, they think they're too dinky. (See Cook's comments linked above for a variation on this theme, including the words "junky," "terrible," and "cramped.")

There is also some anecdotal evidence that demand for Intel's Atom Netbook processors is slowing a bit. (It should be noted that the source for this information is Digitimes, which is not always the most reliable font of information.)

Remember those first 7-inch Asus Eee PCs advertised with kids tapping on chicklet keyboards? Well, Intel apparently wants us to return to those Netbook glory days.

HP Pavilion dv2 laptop starts at about $700: Will upcoming cheap ultra-thin notebooks kill the Netbook?

(Credit: CNET Reviews)

In short, Netbooks are not for adults, according to Anand Chandrasekher, Intel senior vice president and general manager of the Ultra Mobility Group, speaking during a keynote speech at the Intel Developer Forum in Beijing, streamed on Intel's Web site.

"There are things that you would do on a notebook you wouldn't dream of doing on a Netbook...For a kid, a Netbook is fantastic, as an adult you probably want a notebook. So, there are very simple ways of positioning and thinking about it."

(Hmm...what about all those big people with Netbooks? I guess it's time to trade it in for a grown-up computer.)

Now, contrast this with what Stu Pann, vice president in Intel's sales and marketing group, said back in November of last year at a Raymond James IT Supply Chain Conference.

"We originally thought Netbooks would be for emerging markets and younger kids, and there is some of that. It turns out the bulk of the Netbooks sold today are in Western Europe, North America, and for people who just want to grab and go with a notebook," Pann said.

And Pann added: "If you've ever used a Netbook and used a 10-inch screen size--it's fine for an hour. It's not something you're going to use day in and day out."

Updated at 10:45 p.m. PDT throughout.

Intel celebrated the first anniversary of the Atom processor by introducing two new models, while confirming the arrival of Nehalem-based mobile processors later this year and disclosing a new chip dubbed "Jasper Forest."

The chipmaker also did a live demonstration for the first time of the next-generation Atom-based platform, code-named Moorestown. The platform will include a new Moblin software version that will enable a PC-like Internet experience along with cellular voice capabilities, Intel said.

Intel senior vice president Anand Chandrasekher did a live demonstration of the upcoming Moorestown Atom chip in Beijing

(Credit: Intel)

Intel announced two new Atom processors for mobile Internet devices, or MIDs: the Z550 and Z515. The Z550 extends the performance of the Atom line to 2GHz. The Z515 incorporates the Intel Burst Performance Technology (Intel BPT), which enables the processor to run at 1.2GHz when performance is needed, Intel said.

Anand Chandrasekher, Intel senior vice president and general manager of the Ultra Mobility Group, in a keynote speech at the Intel Developer Forum in Beijing, discussed upcoming processors for laptops based on the Nehalem architecture that will be available in the second half of this year as part of the "Calpella" platform. These processors will be more powerful than their predecessors by including such technologies as Intel Hyper-Threading Technology and Intel Turbo Boost Technology.

Chandrasekher also touched on Intel's ultra low-voltage (ULV) processors and how they are creating a category of ultra-thin laptops less than 1-inch thick. Intel is slated to offer lower-priced versions of these processors by early summer that are expected to engender a class of low-cost ultra-thin laptops, which some have described as a MacBook Air for the masses.

Pat Gelsinger, Intel senior vice president and general manager of the Digital Enterprise Group, disclosed, for the first time, the Nehalem EP-based processor code-named Jasper Forest that is specifically designed for embedded and storage applications "to deliver optimal performance per watt...Jasper Forest will be offered in single-, dual- or quad-core designs; ranging from 23 watts to 85 watts," Intel said.

Intel's Atom is proving to be a very popular chip. But is it too low-rent for Apple?

First the news. iSuppli reported Monday that Intel gained share, based on revenue, in the global microprocessor during every quarter of 2008 to finish up with 80.5 percent of the total processor market--a 1.6 percent gain over rivals--partly due to the success of its Atom chip in Netbooks.

Would a hypothetical Apple Netbook be a high-end product like Sony's Vaio P line?

(Credit: Sony)

"Intel's low-priced Atom has become increasingly popular as the Netbook market has gained steam," Matthew Wilkins, principal analyst, compute platforms research, for iSuppli, said in a statement.

Worldwide unit shipments of Netbooks soared by more than 2,000 percent in 2008 and are expected to rise by about 68 percent in 2009, iSuppli said.

Not surprisingly, every major computer maker has announced a Netbook--some, like Toshiba, begrudgingly--and others, like Dell, seemed, at least initially, to put a product out there just in case.

Hewlett-Packard--one of the early leaders in the market--came out (back in April 2008) first with an upscale business-class "Mini-Note" Netbook, but since then HP has added a lower-cost consumer-focused HP Mini 1000 series too. All HP Netbooks now use the Atom processor after a brief flirtation with a Via processor (used because HP developed its Mini-Note before Atom was available).

Sony finally chimed in this year with the a luxury Netbook--the Vaio P series, which ranges in price from $900 to $1,499 with a 128GB solid-state drive and 2GB of memory--both atypical for an Atom-based system.

But not Apple. Now about a year after Intel rolled out the Atom brand. A Russian magazine has posted a pretty compelling mock-up of what an Apple Netbook could (should?) look like. The magazine even proffered some believable specs that were slightly off-kilter--a typical Apple product strategy: a 1.86GHz Atom Z540 (typically not used in Netbooks, most vendors default to the 1.6GHz N270), a 64GB solid-state drive (not unheard of in Netbooks but certainly not common), and, most interestingly, an Nvidia chipset and Nvidia graphics.

One of the challenges Apple faces with a luxury Netbook configuration like this is that it comes uncomfortably close to its pricey MacBook Air, which also offers Nvidia graphics and solid-state drives. This, of course, could change if Apple updates the Air with a more upscale configuration.

Or Apple could bring out an un-Netbook (Apple, of course, will dare not speak the name "Netbook") like Sony but trump Sony by using an inexpensive Intel Core 2 ultra-low-voltage (ULV) processor (due by early summer) that keeps it up-market but far enough below MBA territory.

That said, if Apple goes the Atom-based Netbook route, it will not be immune from the inevitable cannibalization that Atom brings with it.

Some potential MacBook Air buyers would look at a 10- or 11-inch Apple Netbook and say why pay the $1,000 premium? Maybe too many for Apple's taste. We'll see.

Intel's newest Atom processor has slipped out of the starting gate sooner than expected.

Asus 1000HE Eee PC uses the new Atom N280 processor.

(Credit: Asus)

Though the Atom N280 had been expected later this year, it is now shipping to Intel customers. "Asus is already taking preorders for the 1000HE with the N280," Intel spokesperson Bill Calder said Thursday.

Intel doesn't expect the rollout to be as big as the Atom N270, introduced back in June, but the N280 is expected to appear in a few systems, Calder said.

The N280 brings a minuscule clock frequency improvement to the N270, bumping up the speed to only 1.66GHz from the N270's 1.6GHz.

The most noticeable improvement is delivered by the accompanying chipset--the GN40. Its built-in graphics silicon offers--for the first time on an Intel Netbook platform--1080p HD playback (though there will be no Blu-ray logo). Nvidia's Atom-based Ion platform will offer even better graphics, however.

Intel has also increased the front-side bus--a data path between the processor and other silicon--speed from 533MHz to 667MHz.

The N280 won't necessarily be the fastest Atom, however. The Z540, which is targeted at handheld-size mobile Internet devices, has been around since April and runs at 1.86GHz, a faster clock speed than the N280.

News about N280 was reported earlier here.