Lots of Intel Atom tablets expected at Computex -

Intel thinks that the Atom in the netbook has still got a great future but that's certainly not the word on the Fu-Xing Road in Taiwan.

Atom revenues for Intel in its first quarter amounted to $355 million, a fall of 19 percent compared to the fourth quarter, it reported last night.

Most of the vendors we met at the pre-Computex briefing in Taiwan a couple of weeks ago think that the netbook is really no more. That's apart from the big guys like Asustek and Acer - we didn't meet the latter, the former is still keen on netbooks.

One reason is that whether Atom sales have cannibalised Intel notebook shares or not, the vendors certainly take that point of view. Privately, they said that netbooks confused the end user and overall brought down margins on notebooks.

This could be why Intel is currently pushing the Atom for embedded applications at its Developer Forum in Beijing.

At the Intel financial results conference call last night, Paul Otellini said that the company didn't see a change in netbooks - standing at about 20 percent of the entire business. Netbooks are a consumer purchase, he said, and it was pretty robust in the fourth quarter. Atom was a bit down in Q1, he said.  

Intel will produce a dual core Atom in this quarter, but it's clear that the chip company is hoping that if netbooks are dead, tablets will take their place.

Otellini said: "Tablets I view much like netbooks two years ago. Tablets will likely be an expansive market." He said a lot of Intel customers will announce tablets at Computex using the Atom Moorestown. He said there will be products on Android, Windows 7 mobile and on Meego, said Otellini.

The Atom has a healthy profit margin, Intel's CFO said last night. Otellini said that other kinds of products will have Atoms in this year. He thinks there will still be significant growth in the netbook business. Rather than bringing down pricing, Intel will concentrate on additional features.  There will be an Atom chip for fanless netbooks.

Intel had an extraordinarily good first quarter and Otellini is very upbeat about the future. Intel expects more from the year and says there are clear indications that the commercial/enterprise market is beginning to buy again. But Intel doesn't have as many processors in stock as it would like.