Atom-based netbooks entrenched
Pineda acknowledged that Qualcomm faces a challenge because netbooks powered by Atom are already widely available and popular. The product category, which offers razor thin margins because of its low price, is nevertheless hot right now. Market research firm Gartner Inc. projects that shipments of mini-notebooksincluding netbookswill increase to 21 million units this year from 11.7 million units in 2008even as overall PC shipments decline 12 percent.
Pinneda calls Snapdragon a game changer. He and other Qualcomm executives say Snapdragon will define the netbook category by enabling devices that are always on and always connected to a 3G network, similar to the way consumers enjoy a smartphone.
Asked about the lack of Windows XP support, Pineda said this new always on, always connected user experience will ultimately be more relevant than what operating system is used.
Over time, improvements in Google Android and other environments are expected to reduce the software barrier.
"I saw a lot of effort in mobile Linux at the Mobile World Congress this year," said IDC's Morales. "ARM will gain traction as Linux takes off," he added.
Morales said vendors with ARM-based devices are typically selling parts that integrate much of the silicon needed for a netbook for 15 percent less than Intel gets for Atom.
"Netbooks are just not a good semiconductor opportunity, even the PC guys don't like them despite the fact they represent incremental volume," Morales said. "You need to create a high end of this low-end market to make it a more interesting opportunity."
In January, Robert Castellano, president of The Information Network, issued a report suggesting that Intel's fourth quarter 2008 numbers were hurt by the success of netbooks because Atom cost about $200 less than Intel's more expensive Penryn devices for notebooks. Castellano and others have suggested that netbooks cannibalize the market for more expensive notebooks.
Qualcomm's original 1-GHz Snapdragon has been in production since last year. The company in November announced a dual-core 1.5-GHz Snapdragon chipset, which Pineda said will begin sampling in the second half of this year.
Freescale in January introduced an i.MX51 system-on-chip that sells for less than $20, including a separate power management chip and a Linux software stack, said to enable a sub-$200 netbook. TI's OMAP 4 platform is marketed for smartphones and mobile internet devices, but a spokesperson said that could also apply to netbooks, depending on how the term is defined. The platform is capable of supporting netbooks, the spokesperson said.
Europe is generating much of the netbook demand today, in part from telecom service providers selling the devices like cellphones at relatively low prices with an Internet service contract, Morales said.