Intel's Atom chip grows up, moves out of netbooks

PC makers begin using less expensive ships in laptops, which could cut Intel revenues

Several PC vendors at the International CES in Las Vegas this week showed off laptops based on Intel Corp.'s Atom Z-series processors that were originally designed to run small handheld computers.

For example, Sony Electronics Inc. unveiled the P Series mini-laptop based on the 1.33-GHz Atom Z520 processor. The mini-laptop, priced at $900, has an 8-in. widescreen display, 2GB of RAM, a 60GB hard drive, a built-in GPS and 3G modem, as well as Wi-Fi and other features packed inside a sleek 680-gram package that's just 2 centimeters thick.

To date, Atom processors have mostly run netbook computers, but Sony executives noted that the new P series offers far more capabilities than a typical netbook system. Michael Abary, senior vice president of product marketing at Sony Electronics, cited the mini-laptop's the GPS and 3G support as features that set it apart.

"It's definitely more than a netbook, it's a full-featured PC," he said.

Micro-Star International Co. showed off another good looking laptop based on a Z-series processor at CES. The X320 bears a strong resemblance to Apple Inc.'s MacBook Air, but will be cheaper and significantly less powerful, the company said. Packing a 1.33-GHz Atom Z520, the X320 has a 13.4-in. screen, 2GB of RAM and -- at 1.8 centimeters thick -- the 1.3 kilogram laptop is slimmer than Sony's P series.

The look of the Micro-Star and Apple machines may be similar, but the 1.6-GHz or 1.86-GHz Core 2 Duo with 8MB of cache inside the MacBook Air easily outpaces the Atom, which has just 512KB of cache. On the other hand, expect the X320 to cost a fraction of the MacBook Air's 1,800 price tag.

Other laptops based on the Atom Z-series on display at CES include two new models from Asustek, including one with a 512GB solid-state drive.

Bill Calder, a spokesman for Intel, said that though the Atom chip didn't target the laptop market, it certainly can be used in larger devices.

Nonetheless, widespread use of Atom chips in larger systems could hurt Intel financially. Atom processors are less expensive than Intel's other processors, and can represent a smaller percentage of the total component cost of a laptop.

Therefore, Intel executives would rather see users with Core 2 Duo-based laptops as their main computers instead of a netbook.

Intel has done a good job of locking down the specifications of machines based on the newer Atom N270 processor, limiting manufacturers to screen sizes of 10 inches and less and capping the amount of RAM in each system at 1GB. The aim was to segment the laptop market into low-end netbooks based on Atom and larger, more powerful laptops based on the Core 2 Duo, preventing netbook sales from eating into sales of mainstream laptops.

However, the Z-series Atom chips have no such limitations in place, so companies like Dell Inc. have moved to take advantage. In October, Dell unveiled the Z520-based Inspiron Mini 12, which sports a 12-in. screen. The arrival of that system signaled the Z-series was not bound by the same hardware restrictions as the N270.

With the appearance this week of other laptops based on the Z-series, the product gap that exists between netbooks and mainstream laptops appears to be closing, even as Intel seemingly remains firm on the specifications of netbooks that use the 1.6-GHz Atom N270 processor.

Whether or not the Z-series processor, especially more powerful models with higher clock speeds, become widely used in laptops remains to be seen. If users willing to pay $900 for a laptop expect more processing power than the Atom Z-series can muster, such as the ability to encode high-definition video files, the number of laptop models based on the Z-series may be limited. Time will tell.

Martyn Williams in Las Vegas contributed to this story.

Copyright © 2009 IDG Communications, Inc.

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