Intel sees mature markets embracing low-cost PCs

The chipmaker has said the low-cost PC is finding unexpected success in mature, rather than emerging, markets
Written by Victoria Ho, Contributor

The low-cost PC has found its market not in the developing world but, unexpectedly, in more mature markets, Intel has said.

The devices, often small portables capable of accessing the internet and with basic features, for example Intel's Classmate PC and OLPC's XO laptop, have in past years been targeted toward emerging markets in rural countries.

However, Intel thinks mature markets are the device's next great opportunity.

Navin Shenoy, vice president and general manager at Intel Asia-Pacific, told ZDNet Asia that the chipmaker is targeting its new line of low-power processors designed for low-cost PCs at both emerging and mature markets. While currently targeted towards children at the primary-education level in emerging markets, low-cost PCs are expected to gain traction with a broader audience in mature markets.

"Users in the mature markets want these devices as companion devices to what they already have, as a second or third notebook," said Shenoy.

Intel recently announced plans to manufacture a new family of processors designed for MIDs (mobile internet devices) and low-cost PCs. The Atom processors will be based on a new architecture targeted at low-power devices, and are claimed by the chipmaker to be its "smallest and lowest-power processor yet".

Shenoy said: "[MIDs are] definitely not niche device[s] anymore." He added that Intel is expecting 50 million units of such devices to move by 2011.

Explaining the future of low-cost PCs, Shenoy said he is expecting there to be a more significant supply of such devices to the market in the coming years.

"There hasn't been a purpose-driven effort to build for this segment yet... With the success of [Intel's] Classmate PC and Asus' Eee PC, all of the sudden you have an industry building specifically for this market. Volumes will go up tremendously," said Shenoy.

A spokesperson for Asus in Singapore told ZDNet Asia that sales in the region have been "overwhelming", and confirmed the company is facing a shortage globally for Eee PC sets, which has led to many stores running out of stock.

Intel's new Atom will bring the company into head-to-head competition with mobile-device processor manufacturers such as ARM and Texas Instruments. ARM's low-power chips are currently dominant in the mobile-devices market.

Jim McGregor, principal analyst at In-Stat, said in a report: "Intel's expansion into emerging form factors, such as MIDs, with low-power products expands its list of competitors, particularly those in the ARM-processor camp."

Intel had previously been a part of the OLPC project, but dropped out in a high-profile spat late last year. The project has reportedly been dogged by unforeseen production costs, nearly doubling the price of the machines, and a lukewarm reception by governments' education ministries.

Editorial standards