SAN JOSE, Calif. – Intel chief executive Paul Otellini threw down the gauntlet in tablets, the one soft spot in an otherwise solid quarter for the microprocessor giant despite a somewhat sluggish market.
"We will use all the assets at our disposal to win this segment," said Otellini in a conference call in which the company reported record $11.1 billion third quarter revenues and record unit sales of microprocessors.
Intel reported three percent sequential quarterly growth in desktop and server CPU sales and strong growth in its embedded markets. However, it said consumer markets were soft and Atom processor and chip set sales fell four percent sequentially to $396 million.
One analyst on the earnings call suggested the rise of the Apple iPad put a dent in Intel notebook and netbook sales in the quarter.
Otellini countered that estimated sales of as many as eight million iPads in the quarter was "a secondary factor" compared to shipments of 70 million notebook and netbooks in the period.
"No one knows how much canabalization there is in tablets, but the numbers are relatively small," said Otellini. "In the end, the tablet category will add to our bottom line not take away from it," he said promising announcements of Intel-based tablets running Android, MeeGo and Windows in coming months.
"You have to take his statements with a grain of salt," said Leslie Fiering, a research vice president at market watcher Gartner Inc.
"ARM is still more cost effective and more sophisticated in comms [than Atom], and [Atom's] high performance is not really a huge demand factor with tablets which are more about convenience, long battery life and light weight," Fiering said.
"Atom could be competitive in this space, but it's not a foregone conclusion," she added.