Intel Sees Atom Revenue Drop by a Third, Medfield Can't Come Soon Enough

Market watcher IHS Isuppli claims that INtel's revenue from its low-power Atom chips is down 32 per cent year-on-year in the third quarter.

While the company's overall market share of the microprocessor market, as measured by IHS, grew 1.2 percentage points last quarter, its Atom division didn't do so well.

The growing popularity of tablets, which many consumers are purchasing in place of netbooks or low-end laptops, means increased sales for ARM licensees; sales which come directly out of Intel's Atom efforts.

"The boom in media tablet sales has packed both upsides and downsides for Intel - hurting its business in netbook microprocessors, but boosting its sales of chips used in data centers to support cloud computing," claims IHS analyst Matthew Wilkins in a statement regarding the research.

"Because of its broad product line that addresses both the consumer and business side of the microprocessor business, Intel in the third quarter managed to outperform the overall market. Even with the company warning that its fourth-quarter revenue will fall short of expectations, the company still is expected to expand its lead in the global semiconductor market based on its strong performance in the third quarter and the rest of the year."

Intel is clearly in no financial trouble just yet, and it already has plans to address the Atom issue: its next generation of Atom chips, codenamed Medfield, will be aimed at the tablet and smartphone markets, featuring a lower power draw and an integrated system-on-chip design with which the company will be hoping to tempt OEMs and ODMs away from ARM in the burgeoning mobile computing market.