updated 06:05 pm EDT, Tue April 13, 2010
Intel's early 2010 quarter prefers fast notebooks
Intel today posted first quarter 2010 results that were its best ever for the start of a year. The company made a record $10.3 billion in revenue and nearly tripled its net profit compared to a year ago, up 288 percent to $2.4 billion. Most of that was owed to high-end notebook processors, as its overall PC group was saved by all-time high mobile chip revenue.
Simultaneously, Intel's results showed just the opposite effect for netbooks. Revenues from the Atom processors used in the mini notebooks dropped 19 percent year-over-year to $355 million. Average chip prices were slightly hurt by the drop, however, as prices would have been flat without the existence of the costlier Pine Trail platform for Atom.
The results all but confirmed a sudden slowdown in netbook sales in the early part of the year and suggested the business may actually be on the decline. Intel didn't directly explain the shift, but an ongoing recovery from the recession and a more mature market are likely to give more buying power and greater interest in faster notebooks, especially following the addition of mobile Core i3, i5 and i7 chips.
The trend away from netbooks is likely to continue as Intel raised its profit margin estimates for the whole year from a range of 58 to 64 percent earlier to between 62 and 66 cents. Atom chips normally have much lower margins to help netbooks reach their frequently sub-$400 prices.
Intel's success is considered a bellwether for the computer business, as its majority stake in processors will help dictate what major PC makers like Apple, Dell and HP say in their own results due in the next few weeks.