Surprise! Intel Wants Its Netbook Business Back

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A couple years ago, Intel was keen on steering people away from netbooks. The chip maker asked retailers to warn consumers about what netbooks can’t do, and created the “ultra-thin” category to provide a more powerful — and more expensive — alternative.

My, how things have changed.

According to DigiTimes, Intel will offer its Cedar Trail netbook platform to vendors for 30 percent to 50 percent cheaper than current Atom processors, in hopes of giving a shot in the arm to small, low-powered laptops. Netbooks based on Cedar Trail could be priced as low as $200, DigiTimes’ sources say.

With lower prices, Intel will try to revive a netbook market that, after booming for a few years, has now taken a nosedive. Last month, Microsoft said that netbook sales fell by 40 percent in the most recent quarter, fueling an 8 percent drop in consumer PC sales. Intel has described netbook sales as “pretty flat” quarter-over-quarter and year-over-year.

Tablets, and Apple’s iPad in particular, are the obvious culprits. Intel always pitched netbooks as a companion device to more powerful PCs, which is the same purpose that a tablet fulfills. Other factors could include the rise of bigger, more powerful notebooks in the $400 to $500 range and the U.S. economy’s emergence from a recession, reducing the temptation to use a netbook as a primary PC.

Cheaper netbooks are an easy answer to all of those problems while Intel tries to get into the tablet business itself. So far, it’s been slow-going as vendors opt for low-power ARM-based processors in smartphones and tablets.

There’s one twist to the story of Intel’s newfound netbook love: According to DigiTimes, Intel will be shifting its sales targets to emerging markets, such as Brazil and India. We’ll still see netbooks stateside, and they’ll probably get cheaper, but Intel would still prefer that you buy something a little more expensive — as long as it’s not an iPad.