We pronounced the netbook phenomenon all but over last year—they're now merely another class of laptop one can buy, at the cheap end. Except that Intel doesn't think so, and wants to lavish high-tech attention on these low end machines. Intel, which was once used to seeing its "Intel inside" stickers on pretty much everything computer-related, is suffering (rightly so) from tablet envy.
According to Digitimes, Intel has "recently adjusted its netbook strategy" and is ready to "cooperate with its partners including Asustek Computer and Acer to launch netbook devices priced below $199 in regions such as the Middle East, Latin America and Eastern Europe." This data comes from sources inside the industry, and it goes on: For markets other than these regions, like Europe, the U.S., and China, Intel will continue to push netbooks using its new Cedar Trail-M chips but will add spice in the form of "new technologies such as Wireless Display and wireless audio" into these machines, to be priced from $300-$500. Notebooks at the low end of the market, around the $200 bracket and below, will "adopt Intel's own MeeGo operating system" and to ensure it all goes with a swing, Intel's "currently working on developing content and applications that suit each region and has already demonstrated engineering samples to its partners." White-box makers are scheduled to launch machines at this price level in the latter half of 2011.
Is this ringing alarm bells for anyone? Intel basically enabled the revolution in Netbooks, machines which were cut-down versions of full-function laptops, with its pared-down x86 chip, the Atom. But the vim and vigor has left the netbook boom (which was probably half motivated by the global recession at the time) and the world has begun to move on to the next genuine paradigm breaker—the tablet PC. And Intel's showing in the tablet market is terrible. Tablets have required a re-think of UI design, hardware design, and user experience design. All those things require lower-power CPUs inside to provide better battery life. Intel's chips just can't deliver in this field, as they're not as revolutionary in architecture as ARM chips are. In particular, industry analysts are singling out Apple's home-brew A5 chip in the iPad 2 as a singularly revolutionary move. So no genuine "tablets" use Intel chips, although they will in the near future (Intel promises).
As a result, Intel is having to chase business elsewhere—by pushing its low-cost netbooks into developing nations, where the price point is attractive. And by trying to make netbooks in developed nations more attractive by adding in high-end wireless tricks that even expensive laptops currently lack. This will definitely earn Intel healthy chunks of revenue, but one could hardly label it as a sustainable long-term business move. What Intel really needs to do is dial its R&D efforts up to 11 when it comes to tablet-friendly, low-power CPUs.