updated 05:30 pm EST, Thu January 13, 2011
Intel Q4 2010 hits record but Atom near flat
Intel today posted record results for the fall that nonetheless illustrated a pronounced effect from the iPad and other tablets. Its net profit was up 48 percent year-to-year and 10 percent sequentially, to $3.4 billion, but was owed almost exclusively to its large-scale server group and investments. Its revenues for both Atom chips and its regular processors were both flat compared to the summer.
The discrepancy was reflected in the company's yearly performance. Although its computer processor, datacenter and other chip architecture groups were up 21, 35 and 27 percent respectively compared to 2009, the Atom group's revenue was up just eight percent.
Atom processors and their companion chipsets cost less than their full-power counterparts but until this year were still strong components of Intel's results due to volume. The category has been in decline for much of the year due in part to customers buying iPads instead. Early estimates for PC sales in the fall have shown a huge drop for Acer as its over-reliance on its Aspire One netbooks may have cost it over a quarter of its computer sales. Dell and HP, which have leaned on netbooks to a lesser extent, also dropped in key areas.
Some of the drop may have come from a widely perceived oversaturation and lack of differentation. As the prices of full size, full performance notebooks have edged closer, buyers have had less incentive to buy the smaller, slower but fundamentally similar designs. Intel has also had trouble improving the performance in the past two years as most Atom chips are still 1.6GHz single-core processors, while most netbooks still have 1GB of RAM and 250GB or less in hard drive space.
The company is still the dominant full processor designer but is thought by many to have missed its chance to get in on tablets, having only just launched its more tablet-ready Oak Trail (Atom Z600) design in 2011. Officials have partly blamed Microsoft for the problem since it hasn't had a truly tablet-optimized full OS and might not until Windows 8 in 2012.
Intel is poised to thrive in 2011 based mostly on its second-generation Core processors, which beyond main speed improvements have much faster graphics that reduce the need for dedicated video.