Intel Introduces Dual-Core Atom Processor for Netbooks

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Seeking to keep its dominant position in the netbook market, Intel announced Monday that its new mobile dual-core Atom processors have hit the streets in a dozen new netbook models from various manufacturers.

The new dual-core Intel Atom N550, which supports DDR3 memory, powers netbooks from manufacturers including Acer, Asus, Fujitsu, Lenovo, LG, Samsung, MSI and Toshiba.

The release comes as Intel (NASDAQ: INTC), far and away the dominant microprocessor player in the netbook arena, is beginning to see some pressure in that area from its closest rival, AMD. AMD (NYSE: AMD) was the first out of the gate with a dual-core microprocessor aimed at netbooks: HP rolled out its Pavilion dm1z ultraportable notebook with the AMD Athlon II Neo Dual-Core K325 and AMD Turion II Neo Dual-Core K625 processor as options in July.

Until recently, all netbooks have been powered by single-core processors, allowing manufacturers to hold down the price. But performance has suffered as a result. The new dual-core processors may alleviate some of that pain.

But there are also signs that the netbook’s star may be on the wane, eclipsed by a new wave of tablets led by Apple’s iPad. One of those signs, taken from NPD data, is that netbook sales fell 13 percent year-over-year in the month of April after a 45 percent year-over-year gain for the first quarter.

Morgan Stanley in June also issued a report in which it reduced netbook unit estimates to 36.1 million units in 2010, down from prior estimates for 40 million, with unit growth reaching 42.7 million by 2012. Meanwhile, the firm has forecast that global tablet PC sales will reach 45.5 million by 2012.

Katy Huberty of Morgan Stanley said in that report that she thinks the netbook phenomenon may have peaked and tablet PC sales will overtake netbooks because people are finding the Apple (NASDAQ: AAPL) iPad works out quite well as a computing device.

But Erik Reid, director of marketing for mobile platforms at Intel, thinks the market for netbooks will remain strong.

“In their short history, the netbook category has experienced impressive growth,” Reid said. “Having shipped about 70 million Intel Atom chips for netbooks since our launch of the category in 2008, there is obviously a great market for these devices around the world.”

Thor Olavsrud is a contributor to InternetNews.com, the news service of Internet.com, the network for technology professionals.