Demand from PC makers for Intel's Atom processor has started cooling in what may be a shift away from netbooks, industry sources said Monday. Instead of focusing its attention on supplying larger companies like ASUS or Dell, Intel is now believed by DigiTimes to be focusing on smaller builders, particularly those in mainland China, and using them to clear out supplies. The higher-end companies themselves are also turning away from the ultra-mobile chip as a whole.

Anticipation for products based on the second generation of Atom reportedly plays a part in the decrease. However, the shortfall is now being assigned to pressure from very low-cost but standard notebooks, many of which are only slightly more expensive than a typical 10-inch netbook but considerably faster. The wider launch of Intel's Consumer Ultra Low Voltage (CULV) chips in the summer will also play a part as many companies will then have ultraportable systems much faster than netbooks but with a relatively modest premium: Dell's upcoming Inspiron Mini 11 may cost as little as $499 despite having 2GB of memory and a 250GB hard disk.

Intel hasn't commented on the assertions.

If supported in practice, the move would signal a backlash from PC vendors that had previously been quick to jump on Atom. The processor and its near-permanent association with netbooks has helped prop up PC sales during the poor economy but has also severely hurt profit margins for those companies that normally don't depend on the category, including Intel itself. Apple has also gone so far as to attack netbook quality rather than join the market, describing many designs as too small and cheaply built to be worth the investment.